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Mastery, Modularization, and the Workforce Revolution
Michelle R. Weise
Clayton M. Christensen
Copyright © 2014 Clayton Christensen Institute for Disruptive Innovation
All rights reserved.
ISBN: 1500553123
ISBN-13: 978-1500553128
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TABLE OF CONTENTS
1
2
3
4
5
6
A
B
CHAPTERS
Introduction: Got Skills?
Disruptive Innovation and Academic Inertia
Jobs To Be Done: The Shifting Value Proposition of College
The Core of Competency-Based Education
Online Competency-Based Education: Mastery and Modularization
A New Value Network: Industry-Validated Learning Experiences
College Disrupted
Epilogue: Education and Equality
iii
1
9
11
14
27
30
34
APPENDICES
Shifts in Public Policy: Major Developments
Descriptions of Innovators
Western Governors University
UniversityNow’s Patten University
Northern Arizona University’s Personalized Learning
University of Wisconsin’s UW Flex
Southern New Hampshire University’s College for America
Capella University’s FlexPath
Brandman University’s BBA
37
38
38
38
39
40
42
43
43
NOTES
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INTRODUCTION:
GOT SKILLS?
The economic urgency around higher education is undeniable: the price of tuition has
soared; student loan debt now exceeds $1 trillion and is greater than credit card debt;
the dollars available from government sources for colleges are expected to shrink in
the years to come; and the costs for traditional institutions to stay competitive
continue to rise.
At the same time, more education does not necessarily lead to better
outcomes.1 Employers are demanding more academic credentials for every kind of job
yet are at the same time increasingly vocal about their dissatisfaction with the variance
in quality of degree holders.2 The signaling effect of a college degree appears to be
an imprecise encapsulation of one’s skills for the knowledge economy of the times.
McKinsey analysts estimate that the number of skillsets needed in the workforce has
increased rapidly from 178 in September 2009 to 924 in June 2012.3
Students themselves are demanding more direct connections with employers:
87.9 percent of college freshmen cited getting a better job as a vital reason for
pursuing a college degree in the 2012 University of California Los Angeles’ Higher
Education Research Institute’s “American Freshman Survey”—approximately 17
percentage points higher than in the same survey question in 2006;4 a survey of the
U.S. public by Gallup and the Lumina Foundation confirmed similarly high numbers.5
“Learning and work are becoming inseparable,” argued the authors of a report from
the Institute for Public Policy Research, “indeed one could argue that this is precisely
what it means to have a knowledge economy or a learning society. It follows that if
work is becoming learning, then learning needs to become work—and universities
need to become alive to the possibilities.”6
Even the demographics of students seeking postsecondary education are
shifting. The National Center for Education Statistics projects that by 2020, 42 percent
of all college students will be 25 years of age or older.7 More working adults are
becoming responsible for actively honing and developing new skills for the new
technologies and jobs emerging on a day-to-day basis.
Despite these trends, few universities or colleges see the need to adapt to the
surge in demand of skillsets in the workforce. Distancing themselves from the notion
of vocational training, institutions remain wary of aligning their programs and majors
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to the needs of today’s rapidly evolving labor market. At the same time, the business
models of most traditional schools make them structurally incapable of responding to
changes in the markets that they serve. Therefore, whether institutions like it or not,
students are inevitably beginning to question the return on their higher education
investments because the costs of a college degree continue to rise and the gulf
continues to widen between degree holders and the jobs available today.
Who will attend to the skills gap and create stronger linkages to the
workforce? This book illuminates the great disruptive potential of online competencybased education. Workforce training, competency-based learning, and online learning
are clearly not new phenomena, but online competency-based education is
revolutionary because it marks the critical convergence of multiple vectors: the right
learning model, the right technologies, the right customers, and the right business
model. In contrast to other recent trends in higher education, particularly the
tremendous fanfare around massive open online courses (MOOCs), online
competency-based education stands out as the innovation most likely to disrupt
higher education. As traditional institutions struggle to innovate from within and other
education technology vendors attempt to plug and play into the existing system,
online competency-based providers release learning from the constraints of the
academy. By breaking down learning into competencies—not by courses or even
subject matter—these providers can cost-effectively combine modules of learning into
pathways that are agile and adaptable to the changing labor market.
The fusion of modularization with mastery-based learning is the key to
understanding how these providers can build a multitude of stackable credentials or
programs for a wide variety of industries, scale them, and simultaneously drive down
the cost of educating students for the opportunities at hand. These programs target a
growing set of students who are looking for a different value proposition from higher
education—one that centers on targeted and specific learning outcomes, tailored
support, as well as identifiable skillsets that are portable and meaningful to employers.
Moreover, they underscore the valuable role that employers can play in postsecondary
education by creating a whole new value network that connects students directly with
employers.
An examination of online competency-based education unveils the tectonic
shifts to come in higher education. Over time, the industry-validated experiences that
emerge from the strong partnerships between online competency-based providers
and employers will ultimately have the power to override the importance of college
rankings and accreditation.
***
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•
Chapter 1 uses the theory of disruptive innovation to illustrate how the inertia
of the academy inevitably makes way for upstart disruptors—online,
competency-based educational programs—to seize a market of untapped
connections between learning and work.
•
Chapter 2 illuminates how students are looking for a new value proposition
from higher education.
•
Chapter 3 outlines the core—both online and offline—of competency-based
education in order to show in the following chapter why online competencybased education holds particular appeal for the growing segment of the
college-going population described in Chapter 2.
•
Chapter 4 describes how online competency-based education providers—
unfettered by the constraints of the academy—are uniquely positioned to align
learning to workforce needs.
•
Chapter 5 reveals the transformative power of a new value network that
emerges from industry-validated learning experiences.
•
Chapter 6 predicts the long-term impact that online competency-based
education will have on the postsecondary system as a whole.
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DISRUPTIVE INNOVATION AND ACADEMIC INERTIA
When it comes to higher education, there is a lot of buzz about online education’s
potential disruption of traditional postsecondary education. Unfortunately, the word
“disruption” is bandied about so frequently that most audiences misunderstand the
term or imprecisely frame the threat.8
A disruptive innovation explains why it is so difficult for organizations to
sustain success.9 In business, companies tend to innovate faster than their
customers’ needs evolve. Most end up producing products or services that are too
sophisticated, too expensive, or too complicated for many customers in their
market. They pursue these sustaining innovations because this is what has
historically helped them succeed: by charging the highest prices to their most
demanding and sophisticated customers, companies achieve greater profitability.
Inevitably, though, they overshoot the performance needs of their customers and, at
the same time, unwittingly open the door to disruptive innovations at the bottom of
the market. A disruptive innovation gains traction by initially offering simpler, more
affordable, and more convenient products and services to nonconsumers, people for
whom the alternative is nothing at all.
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Understanding the nonconsumer in higher education
Many people who are busy predicting the potential disruption of higher education
miss that the process of disruption began as early as 1989 when the University of
Phoenix launched its fully online university. At that point, online technology had
become reliable enough to help these universities scale the teaching and learning
process and cater to nonconsumers of higher education—students for whom their
alternative to an online higher education was nothing at all. Online technology was
the technological enabler needed to enable disruption in the higher education
industry.10
Some observers, however, tend to dismiss the idea that these learning
pathways were disruptive by disparaging the quality of these educational
experiences.11 A disruptive innovation’s first, simple application, however, is often of
a lower quality according to traditional metrics of performance. Over time, it
improves gradually to become good enough to take on a larger share of the market
by solving more complicated problems.
In this particular case, regardless of the questionable quality of this onlinelearning experience, students flocked to these fully online universities. This first
wave of online education presented working adults with a new value proposition
around flexibility and convenience by allowing many to avoid the opportunity costs
of quitting their jobs. Those who enrolled preferred having a just-good-enough
educational experience to nothing at all. Students were willing to pay a premium
price for a functional, flexible, and convenient source of learning. Unfortunately,
however, these fully online universities were never able to fill satisfactorily the gap
between students and the workforce because they began chasing Title IV money in
a federal financial aid system ripe for gaming. Their march up-market toward a full
transformation of the higher education industry never came to pass, as the student
loan crisis—not to mention some of the predatory recruiting practices of leading forprofits—came to the public’s attention. Nevertheless, even before these revelations
came to light, a second wave of online programs began to emerge, that competed
on price, which, according to the Parthenon Group, is increasingly displacing
convenience as the most important factor for many students in attending college.12
Unlike the University of Phoenix, which charges $570 per credit hour, American
Military University (AMU), a low-cost, for-profit institution, which operates in the
American Public University System (APUS) along with American Public University,
charges $250 per credit hour. A more recent wave of disruptors that includes
Southern New Hampshire University’s College for America (CfA) and
UniversityNow’s Patten University (UNow) is even lower-priced and incorporates
online competency-based learning. We explain the cost advantage of these
particular programs later in the book.
Still, many observers maintain that that these learning pathways are not
disruptive by pointing out how most traditional institutions remain unscathed by
these supposed disruptors.13 The emergence of disruptive innovations, however,
does not entail the immediate downfall of established organizations. Disruptive
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innovations do not compete directly at the outset with the leaders of the industry. In
fact, the theory predicts that head-on competition with incumbents most often
results in failure.
Traditional institutions have continued to thrive financially because the initial
wave of disruptive entrants targeted a completely separate market. Often referred
to as nontraditional students, this market is comprised of people who are often
older than the typical 18 to 22-year-old student population, are not enrolled fulltime, do not live on campus, and have work, family, or other responsibilities that can
interfere with the successful completion of their learning objectives. Oddly, the
nontraditional student has become the new normal, as somewhere around 71
percent of the college-going students in America now fall under this misnomer.14
Most institutions are aware that the demographic of college-going students
is shifting and that students’ priorities are likewise evolving. Nevertheless, just as in
every tale of disruption, the established organization is hamstrung, as it sees the
disruptive entrant making its way into the market but cannot do anything but
develop sustaining innovations. The business model of the incumbent’s organization
inevitably steers its leaders to invest in improvements that affect only its existing or
most desirable or demanding customers.
Particularly over the last few decades, traditional institutions have invested
substantial resources into competing with their fellow institutions. In a race to move
up in the rankings—similar to what we see in industry after industry that has
experienced disruption—most universities have focused their efforts on sustaining
innovations: increasing inputs, such as enhanced technology in teaching, improved
classrooms, more faculty research, and better residence halls and dining facilities.
There are various labels for this up-market pull in higher education. Economist
Gordon Winston describes it as an “arms race.”15 Kaplan CEO Andrew Rosen calls it
“Harvard envy”16: the desire of universities to emulate Harvard’s prestige and
exclusivity by “spending far too much time and energy trying to be something
they’re not.”17 As a report from the National Bureau of Economic Research
explained: “[F]or many institutions, demand-side market pressure may not compel
investment in academic quality, but rather in consumption amenities.”18
Such amenities add significant cost,19 and although they serve well the
traditional, campus-based students, these sustaining innovations do not help
nonconsumers of higher education. Traditional institutions inevitably over-serve
adult learners looking to advance their careers with amenities that they do not need.
These students seek affordable and flexible learning pathways that allow for faster
times to degree completion—not to mention the ability to pick and choose their
education from different institutions and outlets. They are less willing to pay for
what they will never use. Furthermore, looking ahead, these amenities may
overshoot what traditional, campus-based students are willing or able to pay for
them, which would create more headroom for disruptive innovations to grow.
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Academic inertia
Unfortunately, established institutions cannot help but develop sustaining
innovations that carry them up-market because, like most businesses, they are
comprised of four basic and deeply interdependent components.
Figure 1. The elements of a business model
As depicted in Figure 1, the starting point in the creation of any successful
organization’s business model is its value proposition. For a liberal arts college, for
instance, that value proposition might be to offer excellent teaching in small,
intimate settings. Institutional leaders then put in place a set of resources—faculty
members in different departments, dollars spent per student, buildings, labs, and
other capital expenditures—required to deliver that value proposition. In repeatedly
working toward that goal, processes, such as course enrollment, student
recruitment, financial aid packaging, tenure promotion, accreditation management,
and fundraising, coalesce that define how resources are combined to deliver the
value proposition. This very complex set of elements goes through multiple
iterations and cycles of change before a stable revenue formula emerges, which
depends on state and federal subsidies, tuition, and endowment funds, and
supports the resources and processes.
Such stability is difficult to achieve. In fact, once the four interdependent
components come together to deliver education in a sustainable manner, the
business model then begins to work in reverse. Instead of the value proposition
driving the resources, processes, and revenue formula, the business model begins to
dictate the sorts of value propositions the organization can or cannot deliver.20
Because this balance is so challenging to get right, the business model of traditional
institutions cannot evolve easily, particularly in the face of rapid innovation. As a
result, disruptive innovations generally appear unattractive to the organization
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because they are fundamentally at odds with the business model—value
proposition, resources, processes, and revenue formula—of the college or
university.21
Another way to capture the incompatibility of a disruptive innovation within
the business model of an established university is to consider the forces that
encumber the legislative process. Even if a member of Congress were to identify
and envision an innovative solution to a pressing societal problem, the introduction
of a bill can evoke opposition from different constituencies, such as labor unions, the
Chamber of Commerce, or a powerful senator threatening to block the legislation—
all of whom must be appeased in some way. As a result, in order to garner enough
votes to be enshrined as law, the bill is modified to address their concerns and fit
the interests of those with powerful votes. The result is a final bill that only faintly
resembles the original innovative solution.
These same forces are at work in every company and every organization. The
powerful forces that emerge from the balancing act of Figure 1 inevitably take every
new innovative proposal and shape it into a sustaining innovation—one that
conforms to the existing organization’s own business model. This is a core reason
why traditional institutions are at a disadvantage when disruptive innovations
emerge; they are asymmetrically motivated to pursue sustaining innovations only—
not disruptive ones.
A clear example of asymmetric motivation can be found in the computer
industry. When the first personal computers were being commoditized, Digital
Equipment Corporation (DEC) was in the prime of its life and building better and
more expensive minicomputers for their best customers. For the first 10 years, the
personal computer from Apple simply could not perform well enough for DEC’s
customers; in fact, it was marketed as toy for children. The two companies sold to
completely different markets, and it simply did not make sense for DEC to pursue
the personal computer market. DEC’s gross margins were in excess of $100,000 per
unit, whereas the gross margins that could be earned from selling a personal
computer were less than $1,000 per unit. Over time, however, as personal
computers evolved, they became good enough to do much of what mainframes and
minicomputers could do and ultimately disrupted DEC. The only way DEC could
have avoided collapse is if it had set up a new autonomous business unit with new
cost structures, prioritization criteria, and values.
Organizations cannot disrupt themselves. They cannot transform the
business models of their existing business units into disruptive growth businesses
because they will naturally prioritize innovations that promise improved profit
margins relative to their current cost structure. Companies such as Hewlett-Packard,
Johnson & Johnson, and General Electric have managed to survive the last few
decades by creating new, smaller, autonomous disruptive business units and
shutting down or selling off mature ones that had reached the feasible end of their
sustaining-technology trajectories.
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The options for traditional institutions of higher education, however, are
arguably more constrained, as most schools manage even more complicated
business models than a typical company. Colleges and universities generally house
what should be three different business models within one overarching business
model. Figure 2 illustrates these three different models, which we call solution
shops, value-adding process (VAP) businesses, and facilitated networks. 22
Figure 2. The three generic business models
Briefly, a solution shop is structured to diagnose and solve unstructured problems
while charging a fee for service. Certain consulting firms, advertising agencies,
research and development organizations, and law practices are examples of solution
shops. Experts draw on their intuition, training, and analytical and problem-solving
skills to diagnose the cause of complicated problems and then recommend
solutions. Research in a university setting can be described as a solution shop
model.
VAP businesses transform inputs of resources—people, materials, energy,
equipment, information, and capital—into outputs of higher value while charging a
fee for the outcome. Retailing, restauranteering, automobile manufacturing,
petroleum refining, and teaching are examples of VAP businesses.
Finally, facilitated networks are systems in which customers often pay a
membership or subscription fee to buy and sell and to deliver and receive things
from other participants. Much of consumer banking is a network business in which
customers make deposits and withdrawals from a collective pool. Casinos, Second
Life, and multiplayer Internet games could also be described as facilitated networks.
Universities run a multitude of facilitated networks within which students work with
each other, career staff, or even alumni to succeed and have fun.
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Most traditional institutions offer all three of these very distinct conflicting
value propositions around knowledge creation, knowledge proliferation, and
preparation for life and careers—all bundled together. The precise costs of
producing these different parts of an education are in many ways unknowable
because they are interdependent and inseparable in the current system.
The result of bundling together three incompatible business models is a
surge in overhead and direct labor costs. Universities have dramatically increased
their administrative capacities in order to cover these different and often conflicting
value propositions. In a study of all colleges and universities in Massachusetts,
reporter Jon Marcus explained that in no other industry would university enrollment
increase by 26 percent and the ranks of full-time administrators rise by 75 percent—
well over the growth of those involved in teaching and research.23 The Goldwater
Institute called the phenomenon “administrative bloat” in its 2010 report, citing:
Between 1993 and 2007, the number of full-time administrators per
100 students at America’s leading universities grew by 39 percent,
while the number of employees engaged in teaching, research or
service only grew by 18 percent. Inflation-adjusted spending on
administration per student increased by 61 percent during the same
period, while instructional spending per student rose 39 percent.24
Part of the surge in administrative costs is also because of an increased reliance on
adjunct faculty members in colleges. Today, contingent faculty make up 76 percent
of the academic labor force,25 and only 50 percent of faculty are employed fulltime.26 By hiring more contingent faculty members, institutions must update their
payrolls every academic term. Maria C. Maisto, president of the New Faculty
Majority, an advocacy group for instructors off the tenure track, describes the time
and resources dedicated to this repetitive administrative task as “one of the hidden
costs of contingency.”27
Increasing administration is of course a natural response when trying to
coordinate all of a university’s different value propositions, but as economists
Robert E. Martin, professor emeritus at Centre College, and R. Carter Hill, professor
at Louisiana State University at Baton Rouge, concluded, the imbalance between
faculty and administrators is responsible for climbing college costs.28 Inside Higher
Ed’s 2013 survey similarly affirmed that “82 percent [of college and university
business officers] say centralizing/consolidating administrative functions is important
to reducing operating expenses.” Such consolidation, however, is easier said than
done.29
Unfortunately, these fiscal realities leave schools open to disruptive entrants
with far more focused business models. Online providers often concentrate
exclusively on teaching without regard to faculty scholarship or the social growth of
the student population, which drives their costs down.30 Delivering on a single value
proposition is simpler and more straightforward than what most traditional
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institutions must do. Figure 3 illustrates the inordinate complications involved in
coordinating the right mixture of the various components of three distinct business
models.
Figure 3. The many moving parts of delivering on three different value propositions
The challenge is undeniable when it comes to delivering on three different value
propositions around research, teaching, and social growth. It is no wonder that
institutions appear to be resistant to change; most institutions are structurally
incapable of responding to changes in the markets that they serve because this
tenuous and prized stability must remain intact. As evidence, even when traditional
institutions offer online programs, they often price them similar to their existing
programs to support their existing business model. A disruptive innovation appears
financially unattractive for the established institution to pursue relative to its existing
revenue model as well as the other investments that are competing for the
organization’s resources. A better understanding of business model inertia reveals
how traditional institutions remain unchanged in the face of innovation, not because
they are unaware of disruptive entrants, but because they are fundamentally
constrained in responding to systemic shifts in higher education. Because the
conditions are ripe for disruption now, universities are in a perilous position, as they
are unable to respond naturally from within and are playing a game that opens up
more disruptive opportunities from below.
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2
JOBS TO BE DONE:
THE SHIFTING VALUE PROPOSITION OF COLLEGE
The context around higher education has altered dramatically: a college diploma no
longer leads automatically to desirable jobs nor to middle-class status; tuition costs
continue to soar and more of the financial burden of pursuing higher education is
transferred onto students and their families. Meanwhile, students’ priorities are
changing. There are a growing number of students who are finding themselves overserved by the augmented, bundled services that traditional institutions provide.
They are looking for brief, targeted, and affordable lifelong-learning programs with
flexible pacing. Some might already have degrees or are struggling to transition
within or into the workforce; they may be observing firsthand the immediacy of
economic uncertainty. As a result, these students are becoming savvier shoppers of
higher education and are looking for a different job to be done in our parlance.31
The premise of jobs to be done is simple: customers don’t just buy products
or services; they hire them to do a job. As the great marketing professor Theodore
Levitt taught, “The customer doesn’t want a quarter-inch drill. He wants a quarterinch hole!”32 Hence, when one customer “hires” a product to do one job, she may
be delighted with its quality because the product did that particular job well.
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Another customer with a very different job to be done, however, might hire the
same product and judge it to be low in quality—not because the product is
different, but because the job is different. A single product or service can do
multiple jobs depending on who is hiring it.
In this particular case, the major skills gap in the United States has created a
new job to be done for students that centers on learning to do in the workforce.33
As employers have become more vocal about their dissatisfaction with the
unpreparedness of job candidates and have retreated from offering as much training
upon entry as they used to, more students are becoming cognizant of the need to
hire a cost-effective and streamlined program that moves them ahead in their
working lives.
College or graduate school is not necessarily the answer, as many traditional
institutions do not even offer majors or programs in the areas in which students are
looking to skill-up. Although there are various community colleges, regional schools,
and offline competency-based providers that already work in concert with
companies to mitigate workforce shortages,34 it takes time and requires substantial
resources to replicate or tailor programs for different companies and industries.
There is a clear need for providers that can build high-quality programs in a
cost-effective manner. Disruptive entrants have an opportunity to gain traction in
this market of untapped connections between learning and work. Although
traditional schools might characterize these offerings as mere vocational programs,
they are measuring quality or “goodness” with standards that are irrelevant.35 A new
wave of disruptive providers can compete on completely different metrics by
focusing on a more dynamic job to be done for nonconsumers of higher education:
more direct pathways to employment. The notion of vocational training is evolving
beyond career education or factory jobs per se to represent a strengthening of what
Anthony Carnevale, director of Georgetown University’s Center on Education and
the Workforce, calls the “cross-fertilization between liberal education and more
applied curricula.”36
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3
THE CORE OF COMPETENCY-BASED EDUCATION
The perfect storm is here: with costs spiraling out of control, the gap widening
between the academy and the workforce, and existing institutions incapable of
reforming their inefficient business models, online competency-based providers are
now stepping into the void. In order to understand the great promise of these
online competency-based providers, we must first lay out the core of competencybased education. Whether offline or online, competency-based education is about
gaining mastery of a subject regardless of the time it takes to get there. Learning
pathways can differ, as all students come to a subject with varying levels of
understanding and different sets of knowledge and experiences, which, in part, lead
to their learning at different rates. Through direct assessments, a student can be
tested on her mastery of any competency.
In 2011, Susan Patrick, president and CEO of the International Association
for K–12 Online Learning (iNACOL), and Chris Sturgis, an education consultant with
many years of experience in competency-based education, developed a five-part
working definition of high-quality competency education:
1. Students advance upon demonstrated mastery.
2. Competencies include explicit, measurable, transferable learning
objectives that empower students.
3. Assessment is meaningful and a positive learning experience for
students.
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4. Students receive rapid, differentiated support based on their
individual learning needs.
5. Learning outcomes emphasize competencies that include application
and creation of knowledge along with the development of important
skills and dispositions.37
This particular definition was intended for a K–12 audience, but the core of
competency-based learning for the postsecondary world remains the same.
Competency-based programs have no time-based unit. Learning is fixed, and
time is variable; pacing is flexible. Students cannot move on until they have
demonstrated proficiency and mastery of each competency but are encouraged to
try as many times as necessary to demonstrate their proficiency. Although skeptics
may question the “rigor” behind an experience that allows students to keep trying
until they have mastered a competency, this model is actually far more rigorous than
the traditional model, as students are not able to flunk or get away with a merely
average understanding of the material; they must demonstrate mastery—and
therefore dedicated work toward gaining mastery—in any competency.
Toyota's famed production system offers an example of the power of
competency-based education on learning and assessment. In his book Chasing the
Rabbit, Steven Spear recounts working at the passenger-side front seat installation
point on an assembly line at Toyota and one of the Detroit Big Three plants.38 At the
Detroit Big Three factory, the person training Spear said, “The cars come down this
line every 58 seconds, so that’s how long you have to install this seat. Now I’m going
to show you how to do it. First, you do this. Then do that, then click this in here just
like this, then tighten this, then do that,” and so on, until the seat was completely
installed. Spear was quite certain he could do each of those things in the allotted
time, given that he had earned a master’s degree in mechanical engineering from
MIT. When the next car came down the line, he confidently started the process, but
by the end of the 58 seconds he had not completed the installation. His trainer had
to stop the assembly line to fix the problem. He then showed Spear how to do it
again, but when the next car arrived, Spear failed to install the car seat. In the span
of an hour, he managed to install only four seats correctly. One reason why it
historically was so important to test every product when it came off the end of a
production line like the Detroit Big Three’s was that there were typically hundreds of
steps involved in making a product, and the company could not be sure that each
step had been done correctly. In business, the end-of-the-line activity is called
“inspection.” In education, it is called “assessment” or “testing.”
When Spear went to work at the same station in Toyota’s plant, he had a
completely different experience. First, he went to a training station where he was
told, “These are the seven steps required to install this seat successfully. You don’t
have the privilege of learning step 2 until you’ve demonstrated mastery of step 1. If
you master step 1 in a minute, you can begin learning step 2 a minute from now. If
step 1 takes you an hour, then you can learn step 2 in an hour. And if it takes you a
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day, then you can learn step 2 tomorrow. It makes no sense for us to teach you
subsequent steps if you can’t do the prior ones correctly.” Testing and assessment
were integral parts of the process of instruction. As a result, when Spear took his
spot on Toyota’s production line, he was able to do his part correctly the first time
and every time. Toyota had built into its process a mechanism to verify immediately
that each step had been done correctly so that no time or money would be wasted
fixing a defective product at the end of the line. The training time was variable, but
assessment was integrated into content delivery, and the result was fixed; every
person who went through the training could predictably do what he had been
taught to do. As a result, the company did not have to test its products when they
came to the end of the production process.
Frequent, low-stakes assessments, exercises, and projects are integral to
competency-based programs, but audiences often tend to assume mistakenly that
because of the rigorous data and measurement that results, competencies are
inherently STEM-related or align well only with subjects that can be assessed
quantitatively. The emergence of competency-based programs, however, does not
in any way necessitate the death of the liberal arts. Proving the point, Northern
Arizona University (NAU) has created a competency-based degree in the liberal arts
through its Personalized Learning program.
Competencies are simply units that, unlike credit hours, measure specific
student-learning outcomes. As Robert Mendenhall, president of Western Governors
University (WGU), said,
While competency-based education is better for all students
because it allows them to study and learn at their own pace, it is
particularly ideal for the 37 million American adults with some
college but no degree. It makes it possible for them to come back,
accelerate the learning process, and complete a degree, which can
mean a better job, higher earning potential, and a better life.39
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4
ONLINE COMPETENCY-BASED EDUCATION:
MASTERY AND MODULARIZATION
Competency-based education exists offline in many cases, but without a
technological enabler, offline programs cannot take full advantage of what
competencies have to offer. The vanguard of online competency-based learning
providers is developing technology to ensure that time is truly the variable factor
and learning is fixed: assessments are built into the system to ensure students’
proficiency; students can take assessments40 as many times as necessary until they
have mastered the competency; and instructors can rely on an analytics dashboard
and cater to students’ needs like a personalized tutor when necessary.
As impressive as these developments are, however, technology is not the
sole, causal mechanism when it comes to understanding competency-based
education’s potential disruption of traditional institutions of higher education.
Disruption does not necessarily entail a technological breakthrough, but instead
combines nascent technologies with business model innovation.
In this particular case, the powerful integration of robust technologies
enhances the ability of competency-based providers to modularize the learning
process. Competencies have a unique architecture as they break down learning into
modules that are not inextricably tied to courses or topics. Time-based courses are
the main currency in traditional institutions, and in general, it is nearly impossible to
excise a week of learning from one class and insert it into another course in an
unrelated field. In an online competency-based environment, however, all learning
materials are tagged and mapped differently. Competencies are comprised of series
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of learning objectives, and, in many cases, students can draw on resources from
various subject areas to achieve their learning objectives in order to master a
competency. The same online competency-based provider therefore can easily
combine and stack learning modules together for these very different students
because learning is not broken down by subject matter. A student in an MBA
program and another studying nursing might have similar learning objectives but
draw on different content and materials to achieve those learning objectives.
This flexible architecture, which technology enhances, enables online
competency-based providers to create and scale a multitude of stackable
credentials or programs for a wide variety of industries, all while simultaneously
driving down the cost of educating students for the opportunities at hand. The
savings to the students are dramatic: as an example, a full year at CfA is only $2,500
per year, which means that even if it took four years to complete the program (and it
could presumably take much less time because pacing is flexible in a competencybased program), a bachelor’s degree would cost $10,000 total—less than what it
would cost at many community colleges.
The true disruptive potential of these online competency-based programs
lies in the critical convergence of multiple vectors: the right learning model, the right
technologies, the right customers, and the right business model. For a growing set
of students who are looking for a different value proposition out of college—one
that centers on affordable and targeted programs, tailored support, as well as
identifiable skillsets that are portable and meaningful to employers—online
competency-based education hits the mark.
Embedded inefficiencies of the academy and the release from those constraints
Meanwhile, incumbent institutions are not unaware of this oncoming disruption, but
they are prohibited from reacting to these systemic shifts. Overwrought with
constraints, most colleges and universities are structurally incapable of facilitating
innovations that deviate from the way they currently deliver education. To
complicate matters, shared governance between the various stakeholders on
campus—faculty members, administrators, leaders, and boards of trustees—
exacerbates the orchestration of so many moving parts. Time and precedence also
tend to normalize processes that might have been jury-rigged in the past as
workable solutions. Each college or university inevitably builds a “culture” around
these processes that become reified with the passage of time and makes it even
more difficult to effect change from within.41 In turn, those within academia accept
or become habituated to these constraints as the culture, or the way things have
always been done at the institution. The result is a normalization of what we call
embedded inefficiencies.
The following sections juxtapose embedded inefficiencies of traditional
institutions with the most exciting developments from various competency-based
providers to show how effectively online competency-based education releases
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learning from these constraints. Not all of these innovations can be found in a single
organization’s platform or business model today. Instead, we have gathered the
best and most innovative examples from multiple providers in order to illustrate how
competency-based education—in its ideal and most disruptive state—would be able
to diverge from and improve upon the existing order in higher education.
A contrast of embedded inefficiencies and the release from constraints
exposes just how impressively the vanguard of outcomes-oriented learning
pathways diverges from the sustaining innovations in traditional institutions of
higher education. It also makes obvious how existing institutions by necessity are
unable to adopt these exciting developments and why postsecondary education is
poised for dramatic disruption.
Embedded inefficiency: Time is fixed
Institutions of higher learning do everything possible to measure fixed seat time by
relying heavily on the Carnegie unit, or the credit hour. Unfortunately, however, “the
credit hour was never intended to be a measure of, or proxy for student learning.”42
As Amy Laitinen, deputy director of the New America Foundation, wrote, “Andrew
Carnegie set out to fix a problem that had nothing to do with high school courses:
the lack of pensions for college professors.”43 What began as a way of accessing
Carnegie’s pension program quickly became the building block of every college
course and degree program as well as a signaling mechanism of educational quality.
Colleges and society now attribute a bachelor’s degree to the accumulation of 120
hours of course work. This numerical output has strangely become a proxy for
quality even though there are no standard assessments tied to measuring this timebased learning—in other words, there is no assurance that a student has
accomplished anything meaningful in this time.
Indeed, there is actually no substantive reason why college should take four
years.44 As early as 1890, Charles Eliot as president of Harvard University called into
question the need for college to take more than three years. Eliot had tried to
reduce the number of credits needed for a bachelor’s degree; however, because of
financial exigencies, the university decided that it needed the extra 25 percent of
undergraduate tuition revenue in order to stay afloat under budgetary pressures.45
Both the number of years and number of credits for a bachelor’s degree are
arbitrary numbers, but to change them within the existing system would have big
financial and business model repercussions that are not consistent with the existing
models’ value propositions, resources, processes, and revenue formulas.
Fixed seat time, as a result, has become the core of academic institutions,
from measuring teacher workloads to determining academic calendars. It works well
for what we call the factory-based model of teaching that emerged in the late 1800s,
inspired by the efficiencies of the factory system born in the industrial revolution.
Teaching became standardized—done in the same way at the same pace—in order
to reach large batches of students. The number of students increased dramatically
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with the advent of the microphone, and universities can now fill lecture halls with
hundreds of students at a time.46 The traditional models of higher education have
built up tremendous capabilities in—and financial dependence on—this model of
instruction, wherein a professor must pitch the materials at a mid-range level so that
everyone—including those who are advanced and those who are struggling—can
move along at the same pace. Of course, this often leads to a dissatisfying one-sizefits-none experience. Even in the smallest of seminar classrooms, instructors still
struggle to frame a discussion, as they lack an accurate sense of the various skillsets
of the students. It is not unusual for days or weeks—in some cases, a midterm—to
pass by before an instructor grades an assignment and begins to assess a student’s
level of understanding.
Release from constraint: Fixed student-learning outcomes
Emerging online competency-based education platforms release learning from the
constraints of time-based teaching and deal directly with understandable and
assessed proficiencies. Instructors can monitor students’ participation and how they
learn, as every click is stored as data. Some organizations like UNow have built their
platforms in-house, whereas others like Southern New Hampshire University’s CfA
have built theirs on top of Salesforce, a customer relationship management solution.
Assessment is at the core of competency-based programs. These include
formative, summative, and performance-based assessments created by the
organizations themselves. Frequent assessments are built into online-learning
platforms to ensure that students are progressing successfully through the material
and tackling their learning objectives. As an example, CfA subdivides its learning
goals into competencies.47 In one of the learning goals described as “examining
ethical perspectives,” the five competencies are described as follows:
1. Can identify key figures in the field of moral philosophy and explain
their views
2. Can research an academic topic and summarize findings in writing
3. Can critique and edit his/her own writing
4. Can describe major traditions in moral philosophy
5. Can identify and evaluate ethical arguments.48
In these online systems, content is directly aligned to learning objectives such as
these. In order for students to prove mastery of a competency, they engage in
frequent, low-stakes assessments attached to each learning objective. Different
deliverables—projects, quizzes, exercises, and assignments—are interspersed along
the way to ensure that students are gaining proficiency before they attempt the final
assessment.
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Embedded inefficiency: Professor as the fount of knowledge
For centuries, the professor has been the “sage on the stage,” the center of the
proliferation of knowledge. The professor, in theory, plays multiple roles as teacher,
mentor, tutor, assessor, and content curator. It is difficult to imagine a single person
doing all of these things equally well, not to mention also serving as the source of
new knowledge—otherwise known as research. An emphasis on research has been
built into the professoriate. Most graduate students intent on teaching at the
college level take anywhere from six years to a decade to complete their doctoral
studies, and the bulk of that time is dedicated to the rite of passage known as the
dissertation.
Nearly all traditional four-year schools—most of which are not Research I
institutions according to the Carnegie Classification of Institutions of Higher
Education—incorporate rigorous standards of publishing into their tenure and
promotion processes.49 Departments are notorious for ranking research over
teaching when making tenure decisions.50 Strangely enough, much of this prized
research is costly and hidden from the public’s view. Despite the advancements in
online technologies, academics still cling to the superiority of print publications and
closed-access journals. Jason Mittell, an associate professor at Middlebury College,
encapsulates the conundrum concisely, “Universities pay their faculty to write and
publish, then must pay commercial entities to sell those publications back to
them.”51 In the humanities, tenure processes exalt the publication of monographs by
academic presses. These presses issue a small number of copies, which are, for the
most part, purchased by university libraries as opposed to mainstream audiences.
The value system of academic scholarship is so skewed that research findings
are hidden from public view. Professors are incentivized to publish their work in
gated resources that are markedly closed-access, for open is viewed as inferior. The
most reputable journals are often invisible to the mainstream public. Ultimately, as
Dan Cohen, executive director of the Digital Public Library of America wrote, “The
largest hidden cost is the invisibility of what you publish.”52
This costly faculty research remains in a silo, walled off from broad
dissemination to the public. Academics lack access to feedback from people outside
of their fields. Because the disciplines have become so narrowly defined, it is often
the case that the average article is being read by a handful of fellow scholars in the
same field. However great the idea, researchers lack the broader forum through
which their ideas might gain traction, have an impact, or become powerful tools for
others.
Even more disturbing is how the “publish or perish” mentality leads to the
generation of bad research. Particularly in disciplines that are now awash with
research, such as the sciences—there are now somewhere between 6 to 7 million
scientists in the United States compared to the few hundred thousand in the 1950s
when academic research was “still a rarefied pastime”53—the cutthroat nature of
academia has led to what The Economist calls a dangerous “exaggeration and the
cherry-picking of results…scientists have lost their taste for self-policing and quality
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control.”54 The journal revealed that “[l]ast year researchers at one biotech firm,
Amgen, found they could reproduce just six of 53 ‘landmark’ studies in cancer
research. Earlier, a group at Bayer, a drug company, managed to repeat just a
quarter of 67 similarly important papers.”55 Strangely, much of this irreproducible
research is being published in leading peer-reviewed journals with some of the
highest rejection rates of submissions.
The questionable outputs of research underline the impossible task for the
thousands of universities in the United States to produce the same high levels of
research. Stanford University President John Hennessy said, “As a country we are
simply trying to support too many universities that are trying to be research
institutions. Nationally we may not be able to afford as many research institutions
going forward.”56 Nevertheless, the prevailing logic of the academy is that optimal
learning and curriculum design center on original, cutting-edge material delivered
directly by the professor. Such logic, of course, ignores the fact that many
disciplines have established bodies of research and knowledge—general education
courses especially—that are common across most institutions wherein research does
not play the same role.
With all of this weight on research, how much do the students matter? Both
the needs of students as well as of the market are dismissed in favor of the
specialized research interests of the faculty. Andrew Gillen from Education Sector at
American Institutes for Research revealed the “perverse incentives” that “likely
result in lower-quality teaching,” namely that “current hiring and promotion
practices encourage many faculty to consider undergraduates as obstacles in the
way of research, to view undergraduate teaching as something to be ‘avoided like
the plague,’ and offer advice to junior colleagues such as ‘don’t over-prepare your
classes.’”57 Even within a state comprehensive university system such as the
California State University system, a report estimated that 50 percent of faculty
reported that they wanted to do less teaching, and 85 percent reported that they
wanted to do more research.58 The incentives in traditional institutions have strayed
away from teaching to the detriment of student learning.
Release from constraint: Locus of teaching shifts dramatically
Most online universities have done away with tenure, committees, and research and,
at the same time, have subdivided the teacher’s role so that the person teaching the
online course is separate from the person evaluating the students’ work for grades;
these instructors are also different from the people responsible for coaching and
mentoring the students along in their academic careers. Online competency-based
programs separate the multiple roles of professor into two to four different
positions. At WGU, there are student mentors, course mentors, and evaluators. In
NAU’s Personalized Learning program, there are lead faculty, who create and
maintain the curriculum; mentor faculty, who serve as student coaches; and subjectmatter experts who function like tutors, interlocutors, and conversants with the
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students; and graduate assistants, who are responsible for assessments and
feedback on the student’s no-stakes exercises. UNow makes distinctions between
its instructional design team, subject-matter experts, assessors, and mentors. The
breakdown of the professor’s role is not specific to competency-based education
programs. The division of teaching labor exists in various online environments that
put teaching at the center of their work: a single instructor is no longer pulled in
multiple directions but rather has fewer roles to play.
Unlike traditional and other online-learning programs, however, online
competency-based models combine this subdivision of roles with rich data on the
back-end of the platform in order to deliver one-on-one tutorial experiences at
scale. Enabled by advanced learning platforms, instructors can actively monitor the
students’ clicks and intervene only when necessary. Through frequent online
assessments and low-stakes exercises, online competency-based education
platforms can capture in very precise ways a student’s mastery of concepts and
learning objectives. They can alert the instructor if a student is trailing in her studies
or struggling with an exercise. The result is a redefinition of what it means to be
high-touch.
Caricatures of online learning tend to conjure images of a student alone with
a computer—out of reach from vibrant in-person classroom interactions between
faculty members and other students. There is nothing innately personal, however,
about a professor lecturing to a classroom of students or leading even the smallest
of seminars in which any number of students can drift off or get away with being
inattentive or not having done the assigned work relevant to the discussion. Online
competency-based learning environments, on the other hand, can cater to a
student’s needs with more personalized learning. In fact, technology can help
instructors monitor students’ participation better than they might be able to do in a
classroom setting. The guesswork goes away, as instructors access a dashboard that
reflects immediately the concepts that a student might be failing to grasp. Equipped
with an unambiguous profile of a student’s progress, instructors can then intervene
when necessary, pinpoint, and elucidate that specific troublesome concept for the
student.
It is as though each student has a specialized tutor. In American Enterprise
Institute’s recent outlook on education technology, Frederick M. Hess, Bror
Saxberg, and Taryn Hochleitner liken “‘[w]atching’ (with data)” to “any tutor
watching closely as a student works on a problem….One-on-one tutoring is about
the best way we know to provide intense instruction, real-time customized
assessment, and intensive, personalized practice. But it is typically far too expensive
to provide at scale.”59 In an online competency-based model, however, access to
rich data on the backend alters fundamental aspects of the teaching and learning
process. The frequent assessments generate important data about each student.
One tutor can serve many more students at a time because she can efficiently gauge
the students’ level of understanding and intervene only when necessary. These datadriven interactions between teachers and students actually become both richer
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teaching moments and more cost-effective interventions. Some learning platforms
even integrate emerging adaptive learning technologies. Ultimately, instructors can
guide the learning process in an efficient yet highly tailored fashion.60
The technological advancements occurring in higher education will inevitably
put pressure on U.S. graduate programs, especially as online teaching roles continue
to be subdivided into more specific roles that do not require full-fledged doctoral
degrees. By separating the varying and complicated roles that one traditional
professor typically plays, organizations will be able to hire educators who do not
necessarily have PhDs or expect tenure contracts. With more people available who
can meet the specifications of these highly circumscribed roles, will there be
different pathways of potentially different durations within doctoral programs that
enable students to immerse themselves in either specialized research or online
teaching roles? Suffice to say, these are very different capabilities that go fully
against the grain of what the resources and processes—faculty, teaching structures,
and tenure incentives—that exist in the traditional model of teaching and learning.
Embedded inefficiency: Interdependent structures of academia
For centuries, it was difficult to imagine a source other than a university or college
delivering higher education. Over the last few decades, however, the simplicity of
fully online universities has made obvious the inefficiencies and the problematic,
rigid structure of most postsecondary institutions. Each college has its own
interdependent architecture: each facet of the college is designed and made to
work only within the brick-and-mortar college campus itself. The intricacy of this setup is the major reason why it is so difficult for students to transfer credits between
colleges. An interdependent architecture results in an interdependence of credits.
The current system of higher education encourages disparate and subjective
measures of learning. As Laitinen said, “[L]earning standards and assessments are
largely devolved to the level of the individual course. Individual professors often set
their own singular standards, deliver instruction, and then measure the students
against these standards.”61 There is, as a result, no useful metric that can translate
across institutions, state borders, and companies. Grades are poor indicators of
student learning because of severe grade inflation from institution to institution.
Today, the grades in almost half of undergraduate courses are A’s, whereas in 1961,
only 15 percent of grades were A’s.62 There is no agreed-upon standardized unit of
learning. If there were, then credits would be much more easily transferable
between institutions. An A in one institution’s algebra class would mean the same
thing at another institution.
As a result, students are unable to transfer their credits easily between
schools and must retake certain courses. The impact of these redundancies cannot
be ignored. College tuition costs and fees are soaring, and Pell grants offer less and
less relief to students; in 1981, Pell grants covered 69 percent of the cost of tuition,
whereas today, they only cover approximately 34 percent despite the increase in
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Pell money over that same period of 31 years.63 Students are emerging from their
studies with an average of approximately $29,400 worth of student loan debt,64 a
figure that is far more troubling when combined with the fact that half of those who
start college fail to complete their degrees within six years.65 There are now
approximately 37 million Americans with some college experience but no degree to
show for it.66 Even the authors of the College Summit report, who defend a college
education as the “best insurance policy against shifting labor markets,
unemployment, and under-employment,” acknowledge that failing to complete is
the biggest risk of a college education.67
There is a perfect analog to higher education’s inefficient credit transfer
system in our health-care industry. Personal health records are not actually personal;
they are not portable, interoperable, standard-format records that people can take
with them wherever they go. Electronic health record systems are generally
proprietary—accessible within systems but generally not from points outside the
system. It is simply not in the financial interest of health-care providers to enable
other providers from different systems to care easily for their own patients.
Similarly in the case of higher education, universities have little financial
motivation to standardize their interfaces with one another. One of the few states in
the country that has a common course numbering system is Florida. Algebra 1105 is
the same across all public postsecondary institutions in Florida. This common course
numbering ensures that the credits of students will transfer easily. Unfortunately,
however, Florida’s course numbers have little transferability across state lines. When
a student transfers to a destination college, it is an accepted practice for individual
registrars to decide which courses will count for credit. Part of this, of course, is a
financial ploy: students are generally capped in terms of the number of credits with
which they can enter, so that the admitting institution can make a certain amount of
money off of each student. The financial incentives are clearly not aligned for
institutions to facilitate the credit transfer process.
At the same time, the interdependent architecture of most colleges also
prohibits the integration of innovations that would speed up degree completion and
lessen the impact of students’ foregone wages in the pursuit of that degree. The
inability of traditional institutions to evolve toward openness is a complicated
transition with which companies in all industries grapple. Companies that are most
successful in the beginning are those with optimized, interdependent architectures,
but over time and as waves of disruptions sweep through an industry, structures
inevitably evolve toward openness and modularization.
As an example, Apple computer—the most integrated company with a
proprietary architecture—in its early years made the best desktop computers: they
were easier to use and crashed much less often than computers of modular
construction; however, when the functionality of desktop machines became good
enough, IBM dominated the industry as the leading nonintegrated provider of
modular personal computers. Most often, interdependent companies find
themselves making products that are too good for their customers, and their market
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dominance begins to unravel because customers are no longer willing to pay
premium prices for improvements that overshoot their needs. When products
become good enough for customers in terms of reliability and functionality,
customers are only willing to pay for improved performance along a new trajectory
of innovation in speed, convenience, and customization. The basis of competition in
a tier of the market changes and forces a gradual evolution in product architecture
away from interdependence to modularization.68
Release from constraint: The shift to modularization
Competencies lend themselves to being packaged at scale into brief and affordable
programs for a rapidly evolving economy. By breaking learning into portable
segments or modules—not necessarily courses—that center on specific
competencies, learning providers can connect and stack these modules into
different series and clusters that can be integrated into different programs for
various disciplines. Molly Corbett Broad, president of the American Council on
Education (ACE), said, “We are at or approaching a point of significant
transformation where you will be able to snap modules together from a wide array
of choices, or link them in ways that produce what are sometimes called stackable
credentials.”69 Online competency-based providers are well equipped to build a
multitude of programs for very different industries and do it cost-effectively.
The price point of online competency-based degree programs is already
comparable to or lower than community colleges. Most offer simple subscription
models in which students pay a flat rate for a certain period of time and can
complete as many competencies as they wish: CfA charges $2,500 per year;
UniversityNow’s Patten University (UNow) charges $1,330 per four-month period for
undergraduates; University of Wisconsin’s UW Flex offers one option at $2,250 for a
three-month period; Capella University’s FlexPath costs $2,000 per quarter on a
calendar year; Brandman University’s Bachelor of Business Administration (BBA)
costs $5,400 per year; and WGU charges $2,890 for six months for most programs.
To put this in perspective: most two-year MBA programs can cost around $150,000
(executive MBAs are often even more expensive). If a student, however, were to
take the full two years to complete an MBA through Patten University (and the
student could, in all likelihood, finish even more quickly), then she would only pay
$12,480.70
Although these rates are for degree programs, many online competencybased providers could easily cull from their repositories of competencies and create
strategic bundles of learning that do not necessarily end in a degree or a certificate.
Modularization is the key: when learning is broken down into competencies—not by
courses or subject matter—online competency-based providers can easily arrange
modules of learning and package them into different, scalable programs for very
different industries. For newer fields such as big data science, logistics, or design
thinking that do not necessarily exist at traditional institutions, these learning
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providers could collaborate directly with employers to determine the competencies
required and build streamlined learning pathways for interested students. By taking
advantage of modularization and advanced technologies, online competency-based
education providers can build tailored programs on demand that match the needs of
the labor market—all while passing the savings on to the students.
The modularized architecture of competencies also enhances the portability
and stackability of credentials.71 An example of such a credential—now recognized
in 42 states—is American College Testing’s (ACT’s) National Career Readiness
Certificate (NCRC). The credential measures skills in problem solving, critical
thinking, and reading and is endorsed by the National Association of Manufacturers;
the National Center for Construction Education and Research; and the Center for
Energy Workforce Development.72 The Common Career Technical Core, an initiative
jumpstarted by the Common Career Technical Core from the National Association of
State Directors of Career Technical Education, is trying to establish consistent
standards for 16 career clusters by seeking input from industries, businesses, and
secondary and postsecondary institutions.73 These are all valiant efforts on the part
of associations to create meaningful sets of credentials, but it is not yet obvious how
many employers understand and actually use these as hiring criteria. For the
credentials to be truly portable and stackable, employers need to understand and
see them as having real value. Corporate and industry leaders therefore need to do
a better job of identifying and articulating standards that would enable workers to
make a more seamless transition into and within the workforce74 and collaborate
with educators to target the right competencies. There is a clear opportunity for
more industry leaders to formalize and validate emerging credentials.
Embedded inefficiency: Knowledge separated from training
The current education system separates learning to know and learning to do. Rather
than giving students broad, interdisciplinary problems to solve, colleges and
universities channel students through narrow specializations that have become
artificially separated from one another. Salman Khan, founder of the Khan Academy,
a free online education platform and nonprofit organization, captures the arbitrary
nature of this ghettoization of subjects:
Genetics is taught in biology while probability is taught in math, even
though one is really an application of the other. Physics is a separate
class from algebra and calculus despite its being a direct application
of them. Chemistry is partitioned off from physics even though they
study many of the same phenomena at different levels. All of these
divisions limit understanding and suggest a false picture of how the
universe actually works.75
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Khan blames the “balkanizing habits of our current system” for denying students
“the benefit—the physiological benefit—of recognizing connections.”76 It is not
enough, however, simply to teach students the connections between one domain of
knowledge and another. By being presented anomalies and real-world problems,
students must be able to connect ideas on their own without necessarily knowing
that different solutions come from different disciplines. Identifying how a body of
understanding fits together is more useful than understanding the boundaries
between disciplines.
All too often, students are unable to make connections between knowledge
and real-world applications. Illustrating this disassociation, Harvard Professor Eric
Mazur recounted how some of his brightest physics students were unable to make
connections between the equations they had mastered in the classroom to realworld physics problems.77 A film crew highlighted this application gap by asking
newly minted college graduates from Harvard and MIT’s engineering programs to
light a bulb with a battery and a wire. Most of them failed to turn on the light.
The dissociation between knowledge and work stems partly from the faculty
who, in general, do not necessarily envision their scholarship and specialization
within a discipline as having anything to do with training students and equipping
them with specific skills for the workforce. Part of this stems from the powerful set
of processes in place in the research arm of academia—such as tenure promotion—
that encourages basic, non-directed research over applied research. In fact, in
Canada, Germany, and Britain, the government’s push for research with more direct
ties to industry and businesses triggered protest from university researchers who
were resistant to any pressure to show the societal and economic impacts of their
work.78 In an interesting way, college transcripts reflect this disengagement from the
workforce. In their current format, transcripts do little to inform employers of a
candidate’s abilities; they serve as a rough sketch of a candidate’s potential and
merely list the subjects to which a candidate has been exposed. These imprecise
proxies are the closest approximation of student-learning outcomes, as there are no
other assessments available of students’ capabilities at the end of a typical four-year
college experience.
Employers currently put their faith in the brands of institutions as general
indicators of quality without any recourse to useful demonstrations of the outputs of
that learning. They effectively outsource selectivity to postsecondary schools:
college admissions committees sift through high school candidates’ scores on
assessments such as the ACT, SAT, and Advanced Placement (AP) subject tests.79
Although these types of big tests abound at the high school level to certify a
student’s level of learning, few such assessments or markers exist at the collegiate
level. As such, employers are essentially assuming that the candidate has the talent
or potential to make it in the company based on demonstrations of learning from
when they were 16, 17, or 18 years old.
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Release from constraint: Lifelong learning and direct ties to the workforce
Competency-based pathways have the potential to obviate this imprecise recruiting
process. The modular structure of competencies makes it easier to create new
learning experiences that are tied more directly to emergent fields of study and
problems to solve. At UNow, for instance, when a company wishes to teach its
employees a new line of inquiry, instructional design teams confer with industry
leaders in order to determine the concepts that need to be mastered. They then
plan backwards the specific competencies that would feed into this new major or
field of specialization without regard to departmental structures. Such collaborative
efforts ensure a balance of skills and knowledge as well as an application of
competencies into productive outcomes. At the same time, employers are able to
test and validate these newer types of learning experiences as active participants in
the coordination and creation of those competencies.
Skeptics of competency-based learning worry that employers will somehow
end up dictating the requirements for student learning. In editorials around the
country, academics in particular are exhibiting extreme territoriality over student
learning. It is no surprise that professors are fighting against this shifting reality
because the embedded inefficiencies of the university render them unable to adapt
to economic realities without viewing those changes as threats to their livelihood;
however, turf warfare does little to benefit students who look to postsecondary
programs as pathways to a career. Indeed, as Carnevale argued, the economic role
of higher education has gradually altered so that postsecondary education has now
become the “nation’s workforce development system” and that “[i]n spite of its
growing economic importance, our postsecondary education and training system
and labor market information systems remain disconnected … providing information
systems linking postsecondary education and training programs with career
pathways is desperately needed.”80 Despite philosophical concerns about the
purpose of a college education, faculty members must acknowledge that students
are and will be looking for the direct economic relevance of their studies.
The rising cost of college is forcing students to question the returns on their
higher education investments. As a result, the new wave of online competencybased pathways will be especially attractive to students seeking that direct link to
the workforce. Not only are these disruptive entrants pushing innovation on price,
but they are also offering briefer, more convenient, direct, and personalized
pathways to skills that employers can understand and validate.
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5
A NEW VALUE NETWORK:
INDUSTRY-VALIDATED LEARNING EXPERIENCES
The true disruptive threat of these lifelong learning pathways will become evident if
and as they gain traction in different industries and are validated by more and more
employers. Direct partnerships that lead to employer-certified learning experiences
have the potential to create a separate and possibly even more powerful value
network that supersedes the signaling effect of a degree.
As more innovators push for targeted workforce solutions, they will be able
to create learning mechanisms that do not need to be validated by national or
regional accreditors. Accreditation in higher education is itself a sustaining
innovation. Today, it reifies the status quo by drumming up more and more
performance indicators tied directly to time-based requirements that do not directly
affect student learning. In 2006, the U.S. Department of Education (DOE) called
attention to the inadequacies of measuring institutional quality via the credit hour in
its examination of the state of postsecondary education,81 also known as the
Spellings Commission report. The report implicated accrediting agencies as doing
little besides assessing inputs and processes as opposed to prioritizing studentlearning outcomes. Institutional quality is linked to inputs, such as facilities, faculty,
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supplies, and equipment, but there are few metrics when it comes to identifying
measurable student-learning outcomes. These imperfect agencies are the
gatekeepers of Title IV student aid, the primary form of federal support for
institutions.
In order to be eligible for Title IV funding, innovators must seek out
accreditation from a system that functions like a cartel. Because accreditation is a
form of self-governance that higher education institutions run themselves, there is
little if any incentive for a panel of institutional peers to enable the entrance of new,
outside providers who may be threatening to the existing order. The system
rewards maintenance of the status quo. Many innovators today are therefore forced
to fit their creations into existing regulations that prioritize fixed seat time. Such
retrofitting, unfortunately, has the effect of muting the creative potential of even the
most exciting innovations.
Disruptive products require disruptive channels.82 If competency-based
education programs begin to proliferate and are able to help students make more
seamless transitions into and throughout the workforce, then they will be able to
validate their brands without having to seek out accreditation. They will create a
disruption from the margins—outside of the reach of regulators.
Disruptive innovations rarely succeed through a head-on attack against
regulations and the network effects that constitute the power of the incumbents. To
illustrate: Southwest Airlines did not disrupt the airline industry by seeking approval
in the early 1970s from the federal Civil Aeronautics Board for discount prices on
long, interstate routes. Instead, it began flying short routes within the state of
Texas, where the federal regulators lacked jurisdiction. Merrill Lynch was able to
topple the regulation of bank interest rates because it was not a bank and therefore
not regulated by the Federal Reserve when it introduced its interest-bearing cash
management accounts. There are dozens of comparable examples. In each case,
markets that were dominated by entrenched competitors surrounded by powerful
network effects and protected by regulation ultimately gave way to the fait accompli
of a new network, and to efficient, safe markets that emerged by circumventing
regulation.
Learning from its predecessors in innovation, UNow does not even seek Title
IV funding in order to evade completely the bureaucratic quagmire of federal
regulatory oversight and its associated debt obligations for students. Indeed, many
online competency-based programs are so affordable that students are able to
either afford to pay out-of-pocket or cover tuition costs through their employer
tuition assistance programs. Providers like Brandman, UNow, and CfA are partnering
directly with employers and recruiting students through new distribution channels.
By partnering with large companies, these organizations are putting a learning
mechanism in place for employees looking to move up the management chain within
their companies. Because tuition prices are so reasonable, employees are able to
take advantage of their companies’ tuition reimbursement programs (sometimes
$5,000, which can often cover the cost of a program) in order to earn a competency-
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based degree or improve their skillsets. Employers, in turn, rest assured that their
workers are not going into debt in order to pursue an education.
Online competency-based programs will be able to earn the trust of the
employer through these unique distribution channels. Employers will be able to
observe firsthand whether the quality of work or outputs of their employees are
markedly different with these new programs in place. Rather than complaining about
the quality of bachelor’s degree candidates, employers have the opportunity to
build up the skills of prospective workers.83
Herein lies the true disruptive potential of these programs. Because the
employer is truly the ultimate consumer of the graduates in training, employers—not
accreditors—are the only ones who need to be persuaded. By bypassing the system
of accreditation and creating a separate and compelling value network comprised of
employers, these competency-based programs have the power to obviate
accreditation.
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6
COLLEGE DISRUPTED
A critical inflection point is at hand. Nearly half of all newly minted bachelor’sdegree holders are either unable to find employment or underemployed.84 Two
recent Gallup Polls revealed that although 96 percent of chief academic officers
believe that they are doing a good job of preparing students for employment, only
11 percent of business leaders agree that graduates have the requisite skills for
success in the workforce.85 Something is amiss.
Those who scorn vocational training tend to get caught up in its connotations
of career education, corporate training, and utility. Vocational training, however,
does not necessarily preclude the liberal arts or notions of effective citizenship, well
roundedness, or artistry. In fact, as early as 1915, John Dewey railed against the
notion that our understanding of vocation be limited to “occupations where
immediately tangible commodities are produced”: “nothing could be more absurd
than to try to educate individuals with an eye to only one line of activity.”86 Rather,
these new competencies embody what Dewey called “a continuous activity having a
purpose”:
Education through occupations consequently combines within itself
more of the factors conducive to learning than any other method. It
calls instincts and habits into play; it is a foe to passive receptivity.
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It has an end in view; results are to be accomplished. Hence it
appeals to thought; it demands that an idea of an end be steadily
maintained, so that activity cannot be either routine or capricious.
Since the movement of activity must be progressive, leading from
one stage to another, observation and ingenuity are required at
each stage to overcome obstacles and to discover and readapt
means of execution.87
In a similar vein, online competency-based education aligned to workforce needs is
an “education through occupations” that catalyzes engagement and persistence
through recurring low-stakes assessments and leads ultimately to mastery,
proficiency, and fluency. Competencies are identifiable learning outcomes with “an
end in view.”
This learning pathway is not disruptive simply because it features inventive
technology. Rather, it marks the critical convergence of two major vectors: robust
advancements in technology and a growing set of nonconsumers of higher
education who are not finding what they need to progress through traditional forms
of education. Online competency-based providers are relying upon advancements in
technology in order to reach an over-served population. Moreover, the technology
is housed in a simplified business model that is unfettered by the interdependencies
that constrain most incumbent institutions.
Even if traditional institutions could see the benefits of moving to a
competency-based system, then they would be fundamentally incapable of changing
because their value proposition, resources, processes, and revenue formula hang in
a delicate balance that hinders them from addressing potential disruptions. Schools
cannot disrupt themselves. They will naturally prioritize innovations that conform to
their existing business models. A university would have to revolutionize its
scheduling around the belief that students learn at different rates—not en masse—
and ultimately move away from semesters, quarters, and credit hours. The
constraints are herculean when considering the embedded inefficiencies of
institutions. The transformation from time-based learning to competency-based
education will most often require the creation of a skunkworks or spin-off project
that should not have to fit into the main organization’s processes and values. CfA
and NAU’s Personalized Learning are examples of autonomous programs.
Some community colleges are choosing a middle route and experimenting
with online competency-based education by converting a single program at their
schools.88 WGU is guiding 11 community colleges—four using U.S. Department of
Labor grants and seven funded by the Bill & Melinda Gates Foundation. Each school
will be able to see how the transformation to competencies in one program affects
its admissions processes, registrar’s office, scheduling, transcription, accreditation
management, information technology services, and all other facets of university
operations.89 These community colleges are attempting to enact a major
transformation from within their institutions. Each program is being developed in-
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house with the hope of fitting in with the culture of the existing institution—a
formidable task when considering the interdependencies involved. Indeed, the
theory of disruptive innovation predicts that if a new-growth and potentially
disruptive project is housed within an existing organization and does not have a
good fit with the values of the organization, the project will be doomed to fail. The
leaders of these new online competency-based programs must have the autonomy
to set up the right processes and resources that are essential for the new venture’s
success. It will be vital to observe the kinds of resistance these community colleges
encounter as they attempt to modify programs from within and how they navigate
around the embedded inefficiencies of their institutions.
For now, all online competency-based education programs that seek to
facilitate a whole new value network for employers and students will operate on the
margins of the system of higher education. They will not compete head-on with
schools that deliver the 18- to 22-year-old college experience. As a result, the
financial health of traditional institutions will remain unaffected by online
competency-based education. Established schools will rely on the credit hour for as
long as they possibly can. They will continue to view disruptive entrants as irrelevant
to their wellbeing because the growth in a new value network does not affect
demand in the mainstream markets for some time.90
But disruption is a process, not an event. Online competency-based
education is an early-stage threat that will strengthen over the years to become a
significant workforce solution. As these alternative learning pathways proliferate, we
will likely witness a trickle-down effect of competencies on our current system of
credit hours. When outside forces such as affordability, flexibility, and faster times to
completion begin to take hold outside of academia, the already strained business
models of traditional universities will appear less desirable and less relevant to
students. All of the efficiencies of online competency-based education will inevitably
attract more students, as they see the value of a new network that connects them
directly with employers. Employer-validated learning experiences will have
tremendous power in altering the status quo.*
Institutions will not be able to cling to the way they have customarily
delivered higher education as more students begin to pick and choose their learning
from disaggregated online-learning outlets. “[I]nstitutions that are unwilling or
unable to incorporate elements of a competency model,” wrote Joel Shapiro,
associate dean of academics at Northwestern University’s School of Continuing
Studies, “will be forced to defend the value of learning that cannot be easily
assessed and demonstrated. That will be a hard message to communicate and sell,
At the same time, we can imagine that decades from now, there will inevitably emerge a new set of
constraints from this particular set of approaches to learning, which will require a new release.
Workforce competencies are not the end-game for higher education, but they release learning from
major constraints today and enable students to access critical education on-demand.
*
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especially given that students with mastery of applied and technical skillsets tend to
be rewarded with jobs upon graduation.”91
There is talk already of creating new accrediting models that do not look at
institutions as a whole anymore but validate parts of the whole—specific programs,
providers, or alternative offerings other than degrees. National and regional
accrediting agencies, which serve as the arbiters of postsecondary educational
quality, are already feeling pressure from policymakers to make their case for
relevance. Part of the challenge for accreditors is that there is little agreement on
how institutions can demonstrate the quality of student-learning outcomes. In stark
contrast, employers can easily measure the quality of online competency-based
programs; they will either see or not see a marked difference in the level and
outputs of their employees and prospective candidates. We predict, therefore, that
accreditation in general will matter less as employer-validated programs gain
traction.
The partnerships that online competency-based providers are building with
employers highlight Dewey’s “end in view”—the undeniable connection between
education and industry. New distribution channels, such as CfA’s growing network
of 50 partner companies, acknowledge employers as the ultimate consumers of the
students in training. These companies are both looking for new talent and desirous
of skilling-up their existing workforce for advanced opportunities within their
companies.
When an education technology company like UNow can collaborate with an
employer, identify a line of inquiry—a human capital problem to be solved—
determine the competencies and customize a program with the requisite modules to
get students the right skills, it will have an enormous competitive advantage without
needing a U.S. News & World Report ranking. The network effect of industryvalidated experiences will hold sway and even supersede the signaling effect of a
diploma from an accredited institution. Particularly if more community colleges and
lifelong learning mechanisms beyond college take advantage of competency-based
education, then credit-hour-based institutions will inevitably—albeit far down the
line—feel the pressure to adapt to the changing and more dynamic possibilities
afforded by competencies.
Online competency-based education has the potential to provide learning
opportunities that drive down costs, accelerate degree completion, and produce a
variety of convenient, customizable, and timely programs for the emergent needs of
our labor market. What now appear as one-off innovations emerging from the
margins have the potential to force all institutions of higher education to think more
critically about how they offer learning, justify their costs, and consider whether and
how to adapt their curricula to the changing labor market and needs of the
workforce.
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EPILOGUE:
EDUCATION AND EQUALITY
The question remains whether the proliferation of competency-based education
programs will somehow lead to a bifurcation of our higher education system in
which an elite experience remains a costly residential one—separate from more
affordable, training-focused competency-based programs. Such characterizations
misrepresent what will be an equalizing force in what is now a strikingly inequitable
system.
Social stratification is embedded in our current system of higher education:
only a small and privileged set of people participates in the selective, residential
college experience. According to the Georgetown University Center on Education
and the Workforce, when one looks at the trends of freshmen enrollments since
1994, 82 percent of students who attend the top 468 colleges are white, whereas 72
percent of new Hispanic enrollments and 68 percent of African- American
enrollments are in open-access, two- or four-year colleges where completion rates
are substantially lower: 49 percent for open-access two- and four-year colleges
versus 82 percent for selective colleges.92 Only eight percent of those who attend
the top 468 colleges come from the bottom income quartile.93 Because of rising
tuition costs and fees, those who are able to access a high-quality education are
those who can afford to pay for it or those who have access to the right information.
Economists Caroline Hoxby and Sarah Turner report in their work on expanding
college opportunities for the “missing ‘one-offs’”—high-achieving, low-income
students—that students from the bottom quartile of the income distribution for
families tend to apply to non-selective schools when they could in fact be applying
to elite schools.94
Our higher education system, unintentionally perhaps, polarizes by race and
by class, as it channels white students into programs that have greater financial
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resources as well as increased odds of completion.95 Because credentials have come
to serve as a proxy for skill as well as a ticket to enter into the middle class,96
students are trapped in a class-based system that demands this credential but
simultaneously restricts access to a quality education.
In order to confront the growing inequality within our system, we need to
raise the bar for everyone seeking a postsecondary credential. We need a system
that prioritizes the demonstration of student-learning growth and outcomes. For the
more than 13.5 million students attending schools outside of the top 250 colleges
ranked by U.S. News and World Report, we need access to education to be the
equivalent of access to quality. Mastery of subject matter via online technologies can
displace the importance of place, time, and brand and ultimately put an end to the
growing inequality built into our system of education.
Students with obvious and identifiable proficiencies and skills that are related
directly to industry needs will be undeniable contenders in the workforce. Online
competency-based learning can even out the playing field by taking students to the
farthest point possible in their learning experiences, regardless of their starting
point, race, geographical location, or family income. With high standards of
proficiency, quality, and outcomes aligned with employability, online competencybased education can build a dramatically new value network that changes the rules
of the game for the common good.
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About the Authors
MICHELLE R. WEISE is a Senior Research Fellow specializing
in higher education at the Christensen Institute. She was the
Vice President of Academic Affairs for Fidelis Education and
has also held instructional positions at Skidmore College and
Stanford University. Michelle received her BA in
literature from Harvard University and both her MA and PhD
from Stanford University in English literature. In 2005, she
was selected as a Fulbright Scholar to South Korea.
CLAYTON M. CHRISTENSEN is regarded as one of the world’s
top experts on innovation and growth. He is the best-selling
author of eight books and more than a hundred articles.
Professor Christensen holds a BA from Brigham Young University
and an MPhil in applied econometrics from Oxford University,
where he studied as a Rhodes Scholar. He received an MBA and a
DBA from the Harvard Business School, where he is currently the
Kim B. Clark Professor of Business Administration.
About the Institute
The Clayton Christensen Institute for Disruptive Innovation is a nonprofit,
nonpartisan think tank dedicated to improving the world through disruptive
innovation. Founded on the theories of Harvard professor Clayton M. Christensen,
the Institute offers a unique framework for understanding many of society’s most
pressing problems. Its mission is ambitious but clear: work to shape and elevate the
conversation surrounding these issues through rigorous research and public
outreach. With an initial focus on education and health care, the Christensen
Institute is redefining the way policymakers, community leaders, and innovators
address the problems of our day by distilling and promoting the transformational
power of disruptive innovation.
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APPENDIX A
Shifts in public policy: Major developments
March 19, 2013 – U.S. Department of Education’s Dear Colleague letter
The U.S. Department of Education (DOE) issues a Dear Colleague letter that states its intent to
approve certain programs that are not offered in credit or clock hours for participation in Title IV,
Higher Education Act programs.
April 16, 2013 – College for America approved
Southern New Hampshire University’s College for America (CfA) is the first university in the nation to
be approved by the DOE under direct assessment provisions to participate in Federal Student Financial
Aid Programs.
August 12, 2013 – FlexPath approved
Capella University’s FlexPath program is the second university after CfA to be approved by the DOE to
offer competency-based bachelor’s and master’s degree programs that use an approved directassessment learning model.
September 19, 2013 – H.R. 3136
U.S. Representatives Matt Salmon (R-AZ), Jared Polis (D-CO), and Susan Brooks (R-IN) present H.R.
3136, “Advancing Competency-Based Education Demonstration Project Act,” in which any willing
competency-based program is able to submit an application to participate in a demonstration program
that will include 20 institutions to be overseen by the U.S. Secretary of Education. The participants
must measure learning as opposed to the measurement of time, use direct assessments, and include
direct measures of learning such as “projects, papers, examinations, presentations, performances, and
portfolios.”97 Each participating institution must have a minimum of 100 and no more than 3000
students participating in each program. Each program or consortium of programs will be responsible
for an annual report that outlines the meeting of goals, quality assurance, the progress of students
toward recognized degrees, the participation and retention of students, the numbers and types of
students involved in the programs, as well as “any proposed statutory changes designed to support
and enhance the expansion of competency-based education.”98 The bi-partisan bill was referred to the
U.S. House Education and the Workforce Committee and approved by voice vote on July 10, 2014. The
bill was part of a trio of bills passed as a piecemeal reauthorization of the Higher Education Act. On
July 23, 2014, the House voted on the bill: 414 votes in favor, none opposing.
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APPENDIX B
Descriptions of innovators
Western Governors University
Please refer to our case study on Western Governors University (WGU) titled, “The engine behind
WGU: Configuration of a competency-based information system.”99
UniversityNow’s Patten University
Gene Wade, CEO and founder of UniversityNow (UNow), describes deliberately crafting the UNow
business model so that federal oversight would not have the power to curb the company’s innovations.
The company has therefore foregone accepting any Title IV money. By pricing its programs reasonably
and working with employer tuition assistance programs, UNow enables students to pay out-of-pocket
for its various programs.
The company owns two different universities: New Charter University, a nationally accredited
college, and Patten University, a regionally accredited college. As of March 2013, Patten University has
become a strictly competency-based model. In this program, students can complete as many as online
competency-based courses as they can during a 16-week period. Although they are technically enrolled
in one class at a time to encourage completion, students can start coursework in multiple classes while
trying to pass the course in which they are enrolled. Undergraduates are charged $1,330 per fourmonth period whereas graduate students pay $1988 per four-month term in tuition. All of the courses
are self-paced, and each degree program is built with an eye toward maximum efficiency; there are no
electives at Patten University. Each pathway packs all of the necessary competencies into the most
compact set of courses possible—usually 40 courses per degree program. Courses are broken down
into competencies. UNow consults with industry councils to determine the necessary competencies
that must be covered in specific disciplines.
The core mission of Patten University centers on an outcomes-based system with high
standards to indicate mastery of a competency. Each student has the opportunity to test out of a
certain competency by taking the pre-final prior to taking the course. This pre-test option is particularly
suited for those who may have already taken a similar class or derived the knowledge necessary from
past work or academic experiences. If the student passes the pre-final, then she may move on to
another course. This enables students to move more quickly toward degree completion. If the student
fails, however, then she must take the entire course. A student must then become 90 percent proficient
in the eight learning units, or mini courses, within the course before taking the final assessment. The
student’s readiness is reflected in a readiness bar—not a progress bar—at the top of the screen, so
that a student knows when she will be ready to move on to the final assessment. Of course, if students
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are unable to pass the final assessment the first time around, then they may take the final assessment
again; however, the readiness bar is intended to set the student up for success for a first-round pass. In
general, most students are able to complete approximately one course per month.
One of the most unique aspects of Patten University is its learning platform, which UNow built
in-house. Each course’s eight modules are built around eight core-learning objectives. The students are
therefore able to see exactly how materials are tied directly to the learning objectives in the course.
The content in every exercise, quiz, video, assignment, and assessment is tagged and mapped onto a
larger knowledge map on the backend so that designers can see exactly how students are making their
way through the materials toward mastery. Teachers tag useful course materials, but the students
simultaneously crowd source and rate the supplemental resources by voting them up or down the
chain. The instructional design teams have also tagged every piece of content in the courses in order to
map and better understand how students learn and master specific competencies. After a critical mass
of students has passed through a certain course, instructional design teams are then able to sift
through the data in order to understand better how students tend to accomplish their learning
objectives in the course. The teams are then able to readjust and revise the course in order to offer
learning pathways for the next batch of students to accomplish their learning goals more efficiently.
When forming the company, Wade recruited administrators from various institutions such as
Kaplan, WGU, and Education Testing Service (ETS) to take some of the most successful ideas from
different for-profit and nonprofit educational models and combine them into a new experience. As a
result, there are similarities, for instance, among these institutions’ distinctions between instructors and
assessors. Those who teach the class are different from the set of people assessing and evaluating the
students for grades. At the same time, there is a discrete set of advisors who help to motivate the
students and push them to complete their work in each course. Students are also grouped together in
cohorts based—not on term start-dates but—on their progression through the material so that they
can help each other out along the way.
Northern Arizona University’s Personalized Learning
Northern Arizona University’s (NAU’s) Personalized Learning program recently received accreditation
from the Higher Learning Commission (HLC) to offer three degree-granting competency-based
programs in liberal arts, small business administration, and computer information technology.
Structured similarly to WGU, Personalized Learning relies on lead faculty, who create and
maintain the curriculum; mentor faculty, who serve as student coaches; and subject matter
experts, who function as tutors, interlocutors, and conversants with the students. Graduate
assistants are responsible for assessments and feedback on the student’s no-stakes exercises. All of the
faculty members participating in this program are currently separate from the existing NAU faculty, as
the roles are full-time positions. The program anticipates potentially partnering with the NAU Flagstaff
faculty in the future.
In order to be admitted into the program, students must pass, in some cases, up to three
assessments that gauge the prospective students’ math, analytical, and writing skills. Writing skills are
the most important in order to ensure the student’s preparedness for the kinds of exercises and
assessments included in the program.
There are 120 competencies in each degree program—the equivalent of 120 credit hours. The
number, 120, comes from an Arizona state policy and helped the Personalized Learning program also
prove to the HLC and the DOE that its degree programs were in some way equivalent to existing
degree programs based on credit hours. Prospective students are allowed to come in with a maximum
of 64 credits; those credits are then translated and mapped to a database of 120 competencies within
the degree program. After consulting with industry councils, lead faculty, and examining numerous
course syllabi, the leaders narrowed down each degree to 120 competencies that a graduate of the
major should master in order to complete the relevant degree. There are no electives in any of the
three degree programs. Although students may not use work experience to count for certain
competencies, their experience might enable them to pass more quickly out of some competencies
aligned with their work. Once accepted into a program, the student can begin at any time and take as
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many competencies as they wish in a six-month period for a flat rate of $2,500 (in comparison the
tuition for students enrolled on campus is approximately $8,000 per semester). There are no book fees,
technology fees, or graduation fees. The tuition cost includes access to library e-books. NAU relies
upon its partnership with Pearson and will take advantage of the company Knewton’s adaptive learning
technologies, once it is fully functioning within Pearson.
Alison Leigh Brown, president of academic affairs at Personalized Learning, leads the project
and describes this particular competency-based model as more “interdisciplinary at the granular level”
than most other competency-based programs. Brown characterizes everything as being “shot through
with the foundation of a liberal arts education”; students are taught to be more self-aware and
reflective about society, art, and self.
A core mission of Personalized Learning is to teach students to become autodidacts in a
rapidly changing world; Brown explains that they’re teaching students proficiency in how to learn so
that if they emerge, for instance, with skills in a specific programming language that is no longer as
popular, then they will easily be able to adapt to that change and teach themselves how to learn the
next skill.
The learning platform is described as a “hybrid” that uses relational databases and combines
certain competencies to repeat concepts in different content areas. The designers of this model believe
that repetition is the core of mastery. Therefore, at a granular level, the program repeats and
reinforces competencies learned earlier in a different field in order to illustrate how that same
competency is necessary within a seemingly unrelated field. By engaging in independent research and
frequent conversations with mentor professors, students learn to follow their interests and move on to
different sets of materials that reinforce their learning. In order to test out of the competency, students
must answer 86 percent of their post-test correctly. Students considering graduate school, who need
to earn Latin honors, can opt into a mastery test, which is considerably more difficult than the normal
post-test.
The most striking element of this particular competency-based program is the university’s
loyalty to a liberal arts education. Brown describes the process of trying to make the liberal arts degree
“beautiful” so that students do not need to choose between a vocational and a liberal arts education.
University of Wisconsin’s UW Flex
In June of 2012, Governor Scott Walker and University of Wisconsin (UW) System President Kevin Reilly
announced the first competency-based degree program offered by a public university system. UW Flex
offers degrees collaboratively between UW degree-granting institutions and UW-Extension. Thirteen
universities exist within the UW System, as well as 13 two-year colleges that serve as transfer
institutions. UW institutions can choose to participate but are in no way required to do so. UWExtension—UW System's institutional home for outreach and entrepreneurship—provides educational,
operational, and fiscal support. Leading this effort are Aaron Brower, provost of UW-Extension and
professor of social work and higher education, and David Schejbal, dean of UW-Extension's division of
Continuing Education, Online, and E-Learning. UW Flex opened its doors for admission on November
18, 2013.
UW Flex differs from many of the other competency-based programs emerging because it
offers flexible routes to existing degrees at UW. Students who receive a degree through the UW Flex
format are receiving the same credential as residential students at those same institutions. Curricular
oversight is managed by the same faculty who participate in the same campus governance, as well as
the same academic approval processes. At the same time, these degrees differ from the ones offered
to residential students because they are neither term-based nor seat-time based. UW Flex's
competency-based model is intended to suit a specific audience: working adults with families or other
obligations that make it difficult for them to have a campus experience. UW Flex is designed not to
take away students already studying on Wisconsin campuses but rather to serve better the students
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who have been targeted by out-of-state for-profit and nonprofit online providers who need the
flexibility of online coursework.†
Nearly 700,000 Wisconsin adults have some form of postsecondary credit, but only 38 percent
of Wisconsin residents have a two-year degree or higher. Adults returning to college with some units
already in postsecondary education are the prime audience for UW Flex. To align citizens with the
state’s workforce needs, Wisconsin and UW System have tried to forge a new program that will enable
citizens to improve their ability to compete for 21st-century jobs.
The first set of UW Flex programs that opened in November 2013 include UW-Milwaukee's
bachelor’s degree in nursing, bachelor’s in biomedical sciences for diagnostic imaging, bachelor's in
information science and technology, and a certificate in business and technical communications. UWColleges are offering general education courses across 18 departments that can lead to an associate’s
degree in arts and science. A total of 10 to 15 programs will ultimately be offered across the UW
System institutions.
At the core of UW Flex are quality assessments that capture whether students have mastered
the competencies set out for them (the knowledge, skills, and abilities that qualify students for their
degree). In order to maximize the affordability of these programs, prospective UW Flex students will
be granted credit for prior knowledge via assessments that test specific competencies mandatory for
the relevant degree programs. Students do not have to attend classes in a fixed-time environment.
Once they have demonstrated mastery of requisite knowledge and demonstrated appropriate levels of
skill in applying their knowledge, they can move to the next set of competencies on their way to
obtaining their degree.
Because UW Flex degrees have been developed from already existing programs, the
standards have been set by the faculty who created the curriculum. And in certain fields, such as
nursing, national certification processes already exist that identify the benchmark for
mastery. Additionally, UW-Extension has hired full-time assessment and competency-development
specialists to support faculty in creating UW Flex curricular material.
The upside of creating such a program within an already existing and well-regarded public
system of higher education is that the UW institutions themselves (UW-Milwaukee and UW Colleges in
the case of the first set of programs) are already accredited by the HLC. Offering programs in the UW
Flex format required HLC to approve “substantive changes” to these programs, which it did in July of
2013. The HLC, in turn, is working closely with the DOE, as it is developing its own processes to grant
Title IV financial aid to direct-assessment competency-based educational programs.
UW Flex programs are open access, but admissions are based a self-assessment tool (Flex Fit),
followed by personal calls from admissions counselors, to determine:
1. The “fit” between students’ interests and the UW Flex programs being offered.
2. What a student already knows and where she stands via pre-assessment exams.
3. Clarifying expectations for success in UW Flex, including whether the student has
structures in place (e.g., financial, time management, technology, etc.)
to accommodate working productively in the UW Flex format; if not, assistance can
be provided in the form of financial aid, time management, and the like.
4. If the student has the motivation to persist in this kind of setting.
Students prepared for the rigors of this competency-based model have the option of choosing
between two different pricing models:
1. An all-inclusive three-month option in which students are able to take all the
assessments they desire on as many competency skillsets as possible. The flat tuition
rate is set at $2,250 and is targeted for students looking for an accelerated learning
program.
Because UW Flex makes this particular distinction between its residential and Flex students, it
appears that the program is trying to keep UW Flex from disrupting the campus experience. UW Flex
does not appear to have true autonomy to function as a disruptive growth unit, so it is unclear how
disruptive this particular online program will be.
†
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2.
A single competency-set option in which students looking to study at a slower pace
can master one set of competencies in a three-month period for the price of $900
(not subsidized).
In both options, students have access to all learning materials and “wrap around” support from
Academic Success Coaches (ASCs), who provide a combination of academic support, advising,
mentoring, and life coaching. This signature element of the program was designed with educational
research in mind that demonstrates that returning adult students need this kind of assistance,
particularly in self-paced and technologically rich programs. Upon admittance, UW Flex students are
assigned a program-specific ASC who contacts them at least once a week throughout their career in
UW Flex.
Southern New Hampshire University’s College for America
On April 16, 2013, Southern New Hampshire University’s College for America (CfA) was the first
competency-based program in the history of higher education to be approved by the DOE under its
direct assessment provisions to participate in Federal Student Financial Aid Programs. CfA is currently
only available through its 50 partners, which include companies such as The Gap, Partners Healthcare,
McDonald’s, FedEx, ConAgra Foods, Delta Dental, and Goodwill. For $2,500 per year, employees can
enroll in a self-paced online competency-based associate’s-degree program in general studies.
The general studies associate’s degree is made up of 20 goals and subdivided into 120
competencies. Students move through their competencies through a learning platform that is built inhouse at Southern New Hampshire University on top of Salesforce.com, a customer relationship
management (CRM) solution. Salesforce enables CfA to keep track of and report out all interactions
with the student on a dashboard and measure engagement with the student through what the CfA
designers have called kudos. Kudos not only measures and rewards student participation, but also
helps to alert coaches that a student has not received any kudos in a week.
Coaches play a vital role in the learning process: they help students analyze and accomplish
their goals and are able to intervene by email or phone in order to motivate students. The coaches are
separate from the subject matter experts, the instructional designers, and the evaluators who assess
the final projects for each competency. Students have the option of selecting the blue or purple path in
order to demonstrate their proficiency in a subject: blue offers simpler and more projects, and purple
entails fewer and more challenging projects.
CfA is beginning with associate’s degrees and then building bachelor’s degrees in
communication, business, and health care. Its aim is to target non-degreed, working students—most of
whom have been out of school for over 20 years—who need additional skills to continue in the
workforce. Many of these employees have access to tuition assistance through their employers, and as
of January 1, 2014, CfA will be allowed to disburse Title IV money to its students. Currently, there are
no prior learning assessments or transfer credits accepted, but administrators are considering
accepting transfer credits for their future bachelor’s programs. CfA students will, of course, be able to
build upon their 20 CfA goals from their associate’s degree program in order to reach the 40 goals in
the bachelor’s degree program.
The competency-based program at CfA is still very much in its nascence. Through its 2013
pilot program, the designers were able to identify problems and areas that needed improvement for
their 2014 rollout. The instructional design teams are working on clarifying directions for the projects as
well as rubrics and scoring devices for evaluators; they are concentrated on strengthening the reliability
and validity of their assessments. CfA is building e-portfolios as well as a career center for its students.
In addition, it is continually improving the coach’s dashboard as well as partner tools so that employers
can more readily view student progress. The social interaction between students will be built into the
system at a later point in time so that students will be able to participate more easily within their
learning communities.
What is most distinctive about CfA is that it is focused on student outputs. By communicating
with employers to build and vet its programs to fit the needs of the industry, it is questioning how well
the projects map to specific competencies in order to ensure that the projects and competencies are
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realistic and targeted: Can students carry these skills forward? Can they progress in their jobs with
these competencies? CfA is also looking into more sophisticated labor market tools so that it can
create programs for the jobs that exist and are needed today.
The organization has enrolled 800 students since the program began in 2013 and continues to admit
students on the first day of every month from its 50 partner employers.
Capella University’s FlexPath
Capella University is an online university with over 36,000 students and 43 competency-based
programs. These 43 competency-based programs are distinct from the university’s FlexPath programs
(also fully online and competency-based), which use direct assessment. FlexPath was the second after
SNHU’s CfA program to receive approval for Title IV eligibility under the DOE’s direct assessment
provisions.
There are currently only two programs in FlexPath: an undergraduate program in business and
an MBA program. Each program is divided into five to eight program-level outcomes, which are then
subdivided into competencies. As an example, the business degree has seven program outcomes. One
of those program outcomes is to “use appropriate financial models and principles to support
decisions.” That one outcome is then broken down into six competencies and 37 sub-competencies,
which are tested by direct assessments. One course is really a cluster of competencies. As a whole, the
business program has over 170 different sub-competencies that are assessed.
This curricular mapping is described as a backward design process by which the instructional
designers first consult with employers, disciplinary experts, and relevant licensing boards to determine
the standards and exact competencies needed for a student to be successful in her field.
The program currently runs on Blackboard—a learning management system (LMS) that
provides course delivery and management, a community and portal system for communication,
a content management system for centralized control over course content, and a system to record and
analyze student assessment results—but the company is considering other platforms for the next phase
of its operations. Distinct from its other credit-bearing competency based programs, Capella University
does not curate content for its students in these two FlexPath programs. Students are taught to
evaluate open-source content on the web and elsewhere and then are encouraged to “fish” for their
own materials (students in existing credit-bearing programs at Capella University are, in contrast,
prescribed certain texts and resources). One of the competencies built into this process is the
development of students’ informational literacy.
The program began in October of 2013 and is rolling out on a quarterly basis based on the
calendar year—not the academic year. In this subscription model, students are allowed to take as many
courses as they wish in a 12-week period; however, they are enrolled in two courses at a time to
encourage completion. Students are asked to determine their own schedules, and based on these
timelines, coaches reach out to the students and automatic deadline reminders are sent to the
students. The cost for an undergraduate quarter is $2,000, and MBA candidates pay $2,200 per 12week period.
In order to refine their processes and iterate based on student and faculty feedback, the
program is offering these two pathways to no more than 100 students per quarter. It is testing its
hypotheses and tweaking the technical delivery while also trying to figure out how to scale the
programs. It is still learning about faculty loading and how many coaches, tutors, and faculty to assign
to each program. One distinguishing factor about Capella University’s FlexPath program is that
although it is an online program, none of the assessments are automated; faculty members grade all
assessments.
Brandman University’s BBA
Brandman University, a member of the Chapman University System, serves 12,000 nontraditional
students each year distributed among its 26 campuses from San Diego to Seattle and online. Brandman
University began experimenting with flipped classrooms five years ago, before it began offering its fully
online (credit-hour) undergraduate program, which is now ranked eighth in online education by U.S.
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News & World Report. The leaders of the institution saw the move toward competency-based
education as a natural extension of the university, but before building its first competency-based online
program, Brandman University interviewed 1,000 prospective students about whether a competencybased program would fit their needs. After a significant literature review and market research,
Brandman University decided to move forward with the venture.
Brandman University’s competency-based Bachelor of Business Administration (BBA) program
is a fully online degree program that offers a business core with emphases in four different areas:
marketing, supply chain and logistics, management, and information technology. There are on average
approximately 60 competencies for each area of specialization in the BBA program. Each competency
is broken down into specific learning objectives, which then further subdivide into topics and subtopics.
University leaders first consulted with the U.S. Department of Labor/Employment and Training
Administration’s Occupational Information Network (O*NET) database, which contains hundreds of
occupational definitions to help students, job seekers, businesses and workforce development
professionals to understand the national workforce. They sought out professional certifications in order
to backwards-map those into competencies for the BBA program. This backwards design process
resulted in a table of knowledge, skills, and abilities that formed the blueprint for the degree program.
Brandman University also consulted with its own business advisory council, made up of business leaders
from companies such as Oakley, American Hyundai, Blizzard, and other Fortune 500 companies in the
Irvine, Calif., area to ensure that the final assessments had relevance to real-world problem-solving
skills. The competencies were developed with Bloom’s taxonomy in mind, so that level 1 skills (which
make up approximately 40 percent of the program) deal with basic skills of knowledge and
understanding and are assessed via proctored, computerized assessments. Level 2 skills are evaluated
through project-based assessments that test the student’s application or synthesis of knowledge
through simulations and other kinds of performance reviews.
The general education component of the degree program, which addresses applied learning,
innovation and creativity, civic engagement, global cultures, as well as integrated learning, bases its
competencies on the American Association of Colleges and Universities, Liberal Education America’s
Promise, Essential Learning Outcomes, and the Lumina Degree Qualifications Profile (DQP). The DQP,
in particular, served as the basis for Brandman University to establish 21st-century competencies for its
students while also recognizing the need to prepare students for a rapidly changing work environment.
The university also worked with professional associations, such as the Society for Human Resource
Management and the Institute of Supply and Management, to determine and calibrate its
competencies.
Brandman University is partnering with multiple vendors to deliver its BBA program. Flat
World Knowledge is building the learning platform; the company will curate all of the digital content
and integrate adaptive learning technologies as well as big data analytics. Its team of three
instructional design team members and six content managers work directly with the 25 faculty
members and psychometrician at Brandman University to create all of the knowledge content for the
learning platform. The faculty model at Brandman University will be unbundled into instructional design
teams, tutorial faculty, subject-matter experts, and academic coaches who will monitor students’
progress and education. Brandman University is also working with Regent Education to build a new
financial aid system in order to free it from term-based financial aid awards. The university uses Ellucian
Banner, as well as N2N Middleware, so that all of the vendors can work together within the same
system.
The BBA program will cost $5,400 per year or $2,700 per six-month period. The competencybased BBA program was accredited by the Western Association of Schools and Colleges in November
2013. The college filed for approval for direct assessment from the DOE in March 2014 and is awaiting
final approval. The pilot program is set to launch in August 2014 with 50 students from its premier
employer partners that include the aforementioned companies, as well as others such as Kia, Converse,
Kawasaki, and more. The hand selected employees and students will also be eligible for competitive
scholarships for the pilot. Based on interviews and surveys of the students in the pilot program,
Brandman University will make improvements and roll out the program to all of its employer partners in
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November 2014. The institution will also offer a private loan program before the new financial aid
system is functional in January 2015.
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NOTES
We are the most educated generation in American history. See Derek Thompson, “The Best-Educated
Generation in American History Isn’t Educated Enough: A Brief History of the Last 100 Years in
Education Gains,” The Atlantic Monthly, December 12, 2013,
http://www.theatlantic.com/business/archive/2013/12/the-best-educated-generation-in-americanhistory-isnt-educated-enough/282302/.
2
As the McKinsey Global Institute notes, “While a diploma or degree still connotes a certain threshold
of academic training (as well as personal drive), there is too much uncertainty and variance in outcomes.”
Mona Mourshed, Diana Farrell, and Dominic Barton, “Education to Employment: Designing a System
that Works,” McKinsey Center for Government, p. 73, http://www.mckinseyonsociety.com/educationto-employment (accessed April 23, 2013).
3
Mourshed, Farrell, and Barton, p. 68.
4
John H. Pryor, Kevin Eagan, Laura Palucki Blake, Sylvia Hurtado, Jennifer Berdan, and Matthew H.
Case, “The American Freshman: National Norms Fall 2012,” Cooperative Institutional Research
Program at the Higher Education Research Institute at University of California Los Angeles, 2012,
http://www.heri.ucla.edu/monographs/theamericanfreshman2012.pdf.
5
“More than 9 in 10 Americans say that getting a good job and earning more money are at least
somewhat important reasons for getting education beyond high school. About two-thirds (67%) of
Americans say getting a good job is a very important reason for getting education beyond high school.
Nearly that many (65%) say earning more money is a very important reason.” “America’s Call for
Higher Education Redesign,” Lumina Foundation & Gallup, February 5, 2013, p. 4,
http://www.luminafoundation.org/publications/Americas_Call_for_Higher_Education_Redesign.pdf.
6
Michael Barber, Katelyn Donnelly, and Saad Rizvi, “An Avalanche Is Coming: Higher Education and
the Revolution ahead,” Institute for Public Policy Research, March 2013, p. 52,
http://www.ippr.org/images/media/files/publication/2013/04/avalanche-is-coming_Mar2013_10432.pdf.
7
“Knocking at the College Door: Projections of High School Graduates,” Western Interstate
Commission for Higher Education, December 2012, p. 2,
http://www.wiche.edu/info/publications/knocking-8th/knocking-8th.pdf.
8
Critics in particular tend to misuse online education as an imprecise proxy for distance learning,
correspondence courses, massive open online courses (MOOCs), for-profit institutions, competencybased education, adaptive learning, flipped classrooms, blended learning, gamification, and technology
writ large.
1
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The dynamics of disruption play out in every major industry where there is a technology enabler:
Toyota disrupted the Detroit automakers in the automotive industry; mini-mills disrupted the
integrated mills in the steel industry; personal computers disrupted mainframes and minicomputers in
the computing industry; and now we are seeing mobile devices disrupt personal computers.
10
Much like in the hotel industry, for a long time, there was no scalable technology driver capable of
disruptively carrying the business model of low-cost universities up-market. As an example in the hotel
industry, Holiday Inn could never move up-market to disrupt the high-end hotels because if it wanted
to move upscale, then it would have needed to replicate all of the costs of those high-end hotels—the
concierges, fine dining, and so forth. In replicating those costs, it would have lost any disruptive
advantage it had previously.
11
Generally a disruptive entrant does not offer a breakthrough improvement, nor does it even offer a
“good” product from the established organizations’ perspective. Despite the seeming inferiority of this
new higher education “product” as well as higher tuition rates than what comparable public institutions
charged for in-state students, the nonconsumers flocked to these online universities.
12
See Chris Ross, “Where Have All the Students Gone? Enrollment Trends in Private Sector Higher
Education,” Parthenon Perspectives (Boston: The Parthenon Group, 2013).
13
The health of an incumbent organization is also captured in the following section on asymmetric
motivation, but here is another example of how disruptive innovations can sometimes contribute to the
financial health of an established leader in the same industry. Interestingly, even as angioplasty began
thriving as a new technology, for a very long time, cardiac bypass surgery continued to grow. The
reason was that in their efforts to treat patients with partially occluded arteries, cardiologists
discovered many more patients whose arteries were too clogged to be opened with angioplasty—
patients whose disease previously was not diagnosed. So heart surgeons felt no threat—in fact, they
felt healthy, for a long time. This disruption has been underway for decades, but the surgeons only
recently have sensed the threat as the number of open-heart cardiac surgeries has begun to decline.
14
In an analysis of data from the Institute of Education Sciences, Ben Casselman determines that there
were “just over 5 million ‘traditional’ students—full-time students of standard college age enrolled in
four-year public or nonprofit colleges—in the fall of 2011. That’s just 29% of all undergraduates.” See
Ben Casselman, “Number of the Week: ‘Non-Traditional Students Are Majority on College Campuses,”
The Wall Street Journal, July 6, 2013, http://blogs.wsj.com/economics/2013/07/06/number-of-theweek-non-traditional-students-are-majority-on-college-campuses/ (accessed May 13, 2014).
Anya Kamanetz cites that more than three out of four college students today are so-called
nontraditional. See Anya Kamanetz, “The College Experience, for ‘Nontraditional’ Students,” The New
York Times, August 29, 2013 http://www.nytimes.com/roomfordebate/2013/08/29/should-studentslive-on-campus-or-off/the-college-experience-for-nontraditional-students (accessed on May, 12, 2014).
Amanda Ripley writes, “[O]nly a fifth of freshmen actually live on a residential campus.” See Amanda
Ripley, “College Is Dead. Long Live College! Can a new breed of online megacourses finally offer a
college education to more people for less money?” Time Magazine, October 18, 2012,
http://nation.time.com/2012/10/18/college-is-dead-long-live-college/2/ (accessed November 12, 2013).
15
Gordon Winston, “The Positional Arms Race in Higher Education,” Williams Project on the Economics
of Higher Education (Williamstown: Williams College, 2000), http://ideas.repec.org/s/wil/wilehe.html
(accessed February 14, 2013).
16
Andrew S. Rosen, Change.edu: Rebooting for the New Talent Economy (New York: Kaplan Publishing,
2011), p. 1.
17
Rosen, p. 33.
18
Scott Carlson, “What’s the Payoff for the ‘Country Club’ College?” The Chronicle of Higher
Education, January 28, 2013, http://chronicle.com/blogs/buildings/whats-the-payoff-for-the-countryclub-college/32477 (accessed January 28, 2013).
19
The major category of costs in traditional universities is overhead costs, which are a function of the
complexity created by the missions that most conventional universities have chosen for themselves.
Even as universities have raised tuition prices year over year, as a whole they are facing economic
9
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models that are breaking. The increase in the true cost of higher education has actually been hidden
from many students and families over the years because gifts from alumni, earnings from private
university endowments, subsidies from state tax revenues for public universities, and federal subsidies
for students have been used to mitigate some costs. But universities are exhausting these mechanisms.
20
While the starting point in the creation of a business model is the value proposition, once a business
model has coalesced to deliver that value proposition, the causality of events begins to work in reverse,
and the only value propositions that the organization can successfully take to market are those that fit
the existing resources, processes, and profit formula.
21
A formula emerges as the company follows these processes to use its resources to deliver the value
proposition. The revenue formula defines how large the organization must become to break even, what
kind of gross and net margins it must achieve to cover the cost of its resources, and how rapidly it
needs to turn its assets over to achieve an adequate return on investment. The revenue formula in turn
determines the kinds of value propositions that the business model can and cannot offer. These four
elements of the business model become interdependently locked very quickly. Innovations that
conform to the business model are readily funded. Organizations sometimes reject an innovation that
emerges to address a new need in the market, but doesn’t fit these four elements of the business
model. But the organization more frequently co-opts such innovations by forcing them to conform to
the business model in order to get funded. When this happens—funding only flows to innovations that
sustain or fit the business model—the organization loses its ability to respond to fundamental changes
in the markets that it serves. This is what has happened to many universities.
22
Professor Øystein Fjeldstad of the Norwegian School of Management and his colleague Charles
Stabell have developed a framework that defines three general types of job-focused business models.
Professor Fjeldstad chose the terms value shops, value chains, and value networks for these three
types of business models. He has graciously given us permission to use different names for each type.
We use the terms solution shops, value-adding process (VAP) businesses, and facilitated networks.
Those interested in Fjeldstad’s framework should also read C.B. Stabell and Ø.D. Fjeldstad,
“Configuring Value for Competitive Advantage: On Chains, Shops and Networks,” Strategic
Management Journal, Vol. 19, 1998, pp. 413–437.
23
Marcus writes, “Over the last 25 years, the universities’ enrollments have collectively grown by 26
percent, while their ranks of full-time administrators have risen 75 percent.” Citing Bain & Company,
Marcus concludes that “[i]n no other industry would overhead costs be allowed to grow at this rate—
executives would lose their jobs.” See Jon Marcus, “Administrative Positions Skyrocket at
Massachusetts Colleges and Universities,” New England Center for Investigative Reporting, May 16,
2013, http://necir.org/2013/05/16/administrative-positions-skyrocket-at-massachusetts-colleges-anduniversities/ (accessed May 16, 2013).
24
Jay P. Greene, “Administrative Bloat at American Universities: “The Real Reason for High Costs in
Higher Education,” Goldwater Institute, August 17, 2010,
http://goldwaterinstitute.org/article/administrative-bloat-american-universities-real-reason-high-costshigher-education (accessed November 11, 2013).
25
Tamar Lewin, “Gap Widens for Faculty at Colleges, Report Finds,” The New York Times, April 8,
2013, http://www.nytimes.com/2013/04/08/education/gap-in-university-faculty-pay-continues-to-growreport-finds.html?_r=4&%3E& (accessed April 8, 2013).
26
Ben Wildavsky, Andrew Kelly, and Kevin Carey, Reinventing Higher Education: The Promise of
Innovation (Cambridge: Harvard Education Press, 2011), p. 103.
27
Peter Schmidt, “Even in New York, Adjuncts’ Paychecks Can Take Their Sweet Time,” The Chronicle
of Higher Education, October 29, 2013, http://chronicle.com/article/Even-in-New-YorkAdjuncts/142669/?cid=at&utm_source=at&utm_medium=en (accessed October 29, 2013).
28
Jenny Rogers, "Economists Reveal the Golden Ratio of Faculty to Administrators: 3 to 1," The
Chronicle of Higher Education, November 9, 2012,
http://chronicle.texterity.com/chronicle/20121109a?pg=30#pg30 (accessed June 9, 2014)..
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Scott Jaschik and Doug Lederman, “The 2014 Inside Higher Ed Survey of College & University Chief
Academic Officers,” Inside Higher Ed, 2014, p. 15,
http://www.insidehighered.com/download/form.php?width=500&height=550&iframe=true&title=Surv
ey%20of%20College%20and%20University%20Chief%20Academic%20Officers&file=IHE_ProvostsSurv
ey-final.pdf.
30
This niche of nonconsumption had always existed, but the advancements in technology made it
easier to offer a far more convenient value proposition for adult learners with jobs or other
commitments that made commuting to a campus difficult.
31
For more information on the concept of jobs-to-be-done, see Clayton M. Christensen, Scott Cook,
and Taddy Hall, “Marketing Malpractice: The Cause and the Cure,” Harvard Business Review,
December 1, 2005, http://hbr.org/product/marketing-malpractice-the-cause-and-the-cure/an/R0512DPDF-ENG (accessed June 9, 2014).
You may also refer to The Re-Wired Group at http://www.therewiredgroup.com/jobs-to-bedone/.
32
Christensen, Cook, and Hall.
33
Broadly speaking, students hire higher education as: (a) a transition to adulthood, (b) a way of
broadening their views and conceptual understanding of the world, (c) an employment launcher, (d) an
employment preserver, (e) an employment changer, and (f) an employment enhancer. In many cases,
students are not necessarily the savviest shoppers of higher education or able to articulate that they
are hiring higher education for these jobs to be done. As will become evident later though, this
changes when the context around higher education alters dramatically.
The initial wave of fully online universities centered on a narrower job to be done that helped
students conveniently pursue a degree or certification while working. These nonconsumers, or
nontraditional students of higher education, had little need for the transition to adulthood that came
with a residential college experience. Another wave of disruptors has since followed and displaced
convenience with price as a primary factor in people’s decision-making. For-profit groups, like
American Public University System (APUS, which includes American Public University and American
Military University) and Grand Canyon University, offered low-cost online models. Newer disruptive
entrants are pushing innovation on price, which, according to the Parthenon Group, is increasingly
displacing convenience as the most important factor for many students in attending college. See Chris
Ross, “Where Have All the Students Gone? Enrollment Trends in Private Sector Higher Education,”
Parthenon Perspectives (Boston: The Parthenon Group, 2013).
34
Ryan Craig from University Ventures Fund described one example in which “[s]everal community
colleges have a relationship with Pacific Gas and Electric to deliver a PowerPathway program. For its
first class of 70, the program received over 4,000 applications (an admission rate of 1.75%). These
community college-delivered 12-week courses have trained over 160 individuals and PG&E estimates
its new hires from PowerPathway are six months ahead of other new hires. This translates to a $30k
savings in time-to-productivity.” See Ryan Craig, “The Skills Gap and the Spit-Take,” University
Ventures Letter, Vol. III, #21, October 18, 2013, http://us2.campaignarchive1.com/?u=928797bbde35bedb144213a5c&id=ae1ed0bd32&e=80df6124d4 (accessed October
18, 2013).
Journalist Jon Marcus described another situation in Detroit where despite its 11.3 percent
unemployment rate, the city was facing a worker shortage. Two thousand machinists were needed to
use or maintain computer numerical control machine tools. In this particular case, the Workforce
Intelligence Network and its “coalition of 28 employers, three business incubators, seven workforce
development boards and nine community colleges around Detroit use[d] spidering technology to comb
through real-time online help-wanted advertisements and analyze what jobs are open and what skills or
education they require.” See Jon Marcus, “Motown Rising,” United Hemispheres Magazine, January 1,
2013, http://www.hemispheresmagazine.com/2013/01/01/motown-rising/ (accessed June 9, 2014).
35
As an example, when AT&T’s Bell Labs came out with the transistor technology, there was no way it
could compete directly with vacuum tubes, which were the core technology powering RCA’s tabletop
29
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radios, standalone televisions, and other sophisticated communication devices. The initial, primitive
technology of the transistor, which became the building block of what we now call solid-state
electronics, was ideal for small devices such as hearing aids or Sony’s creation of the pocket transistor
radios in 1955. Although Sony’s handheld device could come nowhere close to competing with the
quality of sound from a tabletop radio, the transistor radio was perfect for a large market of teenagers
looking to listen to their rock music out of earshot from their parents. The transistor radio fit the needs
of nonconsumers—people who previously were not able to be served or were not desirable to serve.
For these teenagers, the low quality of transistor radios was preferable to their alternative, which was
nothing at all. Over time, Sony improved its technology and came out with black and white portable
televisions in 1959. Again, the improved technology served a niche of nonconsumers, a significant
swath of people who could not afford standalone televisions or who lived in tight quarters that could
not accommodate larger appliances. By the late 1960s, solid-state electronics had improved to the
point where the transistor could handle the power required to make larger products. Ultimately, the
quality of Sony’s products improved to power larger televisions and radios and ultimately became
good enough that it wiped out RCA from the market.
36
Anthony P. Carnevale writes, “The inescapable reality is that ours is a society based on work. Those
who are not equipped with the knowledge and skills necessary to get and keep good jobs are denied
the genuine social inclusion that is the real test of full citizenship… if secondary and postsecondary
educators cannot fulfill their economic mission to help grow the economy by preparing youths and
adults to become successful workers, then they also will fail in their cultural and political mission to
create good neighbors, good citizens, and lifelong learners. Increasing the economic relevance of
education should, if done properly, extend the ability of educators to empower Americans to work in
the world, rather than retreat from it.” See Samual M. Hines Jr., Creating the Entrepreneurial University
to Support Liberal Education (Washington, D.C.: American Association of Colleges and Universities), pp.
29–30.
37
Chris Sturgis and Susan Patrick, “It’s Not a Matter of Time: Highlights from the 2011 CompetencyBased Learning Summit,” iNACOL, 2011, http://www.inacol.org/cms/wpcontent/uploads/2012/09/iNACOL_Its_Not_A_Matter_of_Time_full_report.pdf.
38
Steven Spear, Chasing the Rabbit: How Market Leaders Outdistance the Competition and How Great
Companies Can Catch Up and Win (New York: McGraw-Hill, 2008).
39
Robert Mendenhall, “What is Competency-Based Education?” The Huffington Post, September 5,
2012, http://www.huffingtonpost.com/dr-robert-mendenhall/competency-based-learning_b_1855374.html (accessed October 8, 2013).
40
When these assessments are objective in nature, meaning that they have right or wrong answers, of
course the assessment items should be varied.
41
For a broader discussion of culture, see Clayton M. Christensen, “What Is An Organization’s Culture?”
Harvard Business School, August 2, 2006 (9-399-104). That note itself draws heavily from the concepts
explained in the first three chapters of the following book: Edgar Schein, Organizational Culture and
Leadership (San Francisco: Jossey-Bass Publishers, 1988).
42
Amy Laitinen, “Cracking the Credit Hour,” New America Foundation and Education Sector,
September 2012, p. 5,
http://higheredwatch.newamerica.net/sites/newamerica.net/files/policydocs/Cracking_the_Credit_Hou
r_Sept5_0.pdf.
43
Laitinen, p. 4.
44
Some may argue that fun and the social growth component are a vital part of the college experience,
but why then would the fun need to stop after four years instead of five or three? Although four is an
arbitrary number, we as a society deem it as a meaningful division between transitioning out of
secondary school and entering the “real world.”
45
Clayton M. Christensen and Henry J. Eyring, The Innovative University: Changing the DNA of Higher
Education from the Inside Out (New York: John Wiley & Sons, 2011), p. 58.
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As writer Clay Shirky explains, “Without a microphone, manageable class size tops out at about 50.
With a microphone, the sky's the limit—you can have huge lectures with expensive profs, and lots of
sections taught by cheap TAs and adjuncts…The microphone was a way to lower our cost per student,
without lowering the price we charged.” Clay Shirky, “Your Massively Open Offline College Is Broken,”
The Awl, February 7, 2013, http://www.theawl.com/2013/02/how-to-save-college (accessed January 9,
2014).
47
Full disclosure: Clayton Christensen is a member of the Southern New Hampshire University Board of
Trustees.
48
Email correspondence with Kristine Clerkin, January 8, 2014.
49
Note “four-year”—not community colleges. Most community colleges do not require faculty to
publish in order to earn tenure. Nevertheless, it is interesting to note that community colleges often
move up-market from two-year degree-granting institutions to four-year colleges. The research
component makes its way into these schools in an effort to build prestige. Even in California where
there is a master plan, the California State Universities have begun morphing into research universities,
normally the purview of the University of California system, building up research facilities in a range of
fields from agriculture to biotechnology.
50
According to Andrew Gillen’s report titled, “Selling Students Short: Declining Teaching Loads at
Colleges and Universities,” the Modern Language Association found a sharp increase from 1968 to
2007 in the percentage of English and foreign-language departments that ranked “scholarship” as
more important than teaching when making tenure decisions. The figure more than doubled, the report
says, from 35.4 percent to 75.7 percent. Gillen’s report was later retracted by Education Sector and the
American Council of Trustees and Alumni; however, the retraction was in reaction to faulty data about
professors’ teaching loads. This particular statement stands on its own. See Sydni Dunn, “Lighter
Teaching Loads for Faculty Contribute to Rising College Costs, Report Says,” The Chronicle of Higher
Education, March 21, 2013, http://chronicle.com/article/Lighter-Teaching-Loads/138025/ (accessed
March 21, 2013).
51
Jason Mittell, “The Real Digital Change Agent,” The Chronicle of Higher Education, March 4, 2013,
http://chronicle.com/article/The-Real-Digital-ChangeAgent/137589/?cid=cr&utm_source=cr&utm_medium=en (accessed March 4, 2013).
52
Dan Cohen, “Open Access Publishing and Scholarly Values,” Dan Cohen, May 27, 2010,
http://www.dancohen.org/2010/05/27/open-access-publishing-and-scholarly-values/ (accessed
February 14, 2013).
53
“How Science Goes Wrong,” The Economist, October 19, 2013,
http://www.economist.com/news/leaders/21588069-scientific-research-has-changed-world-now-itneeds-change-itself-how-science-goes-wrong (accessed October 23, 2013).
54
“How Science Goes Wrong.”
55
“How Science Goes Wrong.”
56
Nathan Heller, “Laptop U,” The New Yorker, May 20, 2013,
http://www.newyorker.com/reporting/2013/05/20/130520fa_fact_heller?currentPage=all (accessed
May 20, 2013).
57
Andrew Gillen, “Selling Students Short: Declining Teaching Loads at Colleges and Universities,"
Education Sector, March 20, 2013, p. 7. This report was retracted after Gillen’s calculations were called
into question by Physics Professor Charles L. Schwartz from the University of California at Berkeley.
Gillen’s report was flawed in its interpretation of data from the U.S. Department of Education; he had
asserted that at public comprehensive universities, across all tenured and tenure-track faculty, the
average number of classes taught per term declined from 4.0 in 1987–88 to an average of 3.25 in 2003–
04, an 18.75 percent decline. Had those teaching loads not been reduced, Gillen asserts that at public
universities in general, “82 percent of the tuition increase from 1987–1988 to 2003–2004 could have
been avoided.” Despite the computational errors in Gillen’s report, the incentives outlined above still
importantly underscore the tradeoffs for professors who must juggle their dual roles as both teachers
and scholars.
46
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Richard T. Serpe et al., CSU Faculty Workload Report (San Marcos: The Social and Behavioral
Research Institute, 2002).
59
Frederick M. Hess, Bror Saxberg, Taryn Hochleitner, “E-Rate, Education technology, and School
Reform,” American Enterprise Institute, October 22, 2013, http://www.aei.org/files/2013/10/21/-erateeducation-technology-and-school-reform_163836868111.pdf.
60
Indeed, it is likely that over time, learning platforms will improve dramatically so that these
interventions will occur automatically with or without an instructor. Experts from IBM predict that
Watson-powered computers will be able to “track and analyse each student’s progress” in order to
“tailor curricula” and make learning much “more customized” by providing more precise insight at the
right time and when it is most needed. As Vice President of Innovation Bernie Meyerson explains,
“Basically, the classroom learns you. It is surprisingly straightforward to do.” See “Classrooms that
learn about students are not far away, says IBM,” BusinessDay Live, December 17, 2013,
http://www.bdlive.co.za/life/gadgets/2013/12/17/classrooms-that-learn-about-students-are-not-faraway-says-ibm (accessed December 17, 2013).
61
Amy Laitinen, “Changing the Way We Account for College Credit,” Issues in Science and Technology
Online, Winter 2013, http://www.issues.org/29.2/Amy.html (accessed March 27, 2013).
62
Amy Laitinen, “Cracking the Credit Hour,” New America Foundation and Education Sector,
September 2012, p. 6,
http://higheredwatch.newamerica.net/sites/newamerica.net/files/policydocs/Cracking_the_Credit_Hou
r_Sept5_0.pdf.
63
Alexander Zaitchik, “Americans Have Finally Awakened to the Decades-Long Corruption of Higher
Education,” Salon.com, April 23, 2012,
http://www.salon.com/2012/04/23/protesters_furious_new_front/ (accessed March 27, 2013).
64
“Student Debt and the Class of 2012,” The Institute for College Access & Success, December 2013,
http://projectonstudentdebt.org/files/pub/classof2012.pdf.
65
J.B. Schramm, Chad Aldeman, Andrew Rotherham, Rachael Brown, and Jordan Cross, “Smart
Shoppers: The End of the ‘College for All’ Debate?” College Summit, November 2013, p. 13,
http://www.collegesummit.org/files/SmartShoppersPDF.pdf.
66
Anya Kamanetz, “Dropouts: College’s 37-Million-Person Crisis—and How to Solve It,” The Atlantic,
December 5, 2012, http://www.theatlantic.com/business/archive/2012/12/dropouts-colleges-37-millionperson-crisis-and-how-to-solve-it/265916/ (accessed October 9, 2013).
67
Schramm, Aldeman, Rotherham, Brown, and Cross, p. 13.
68
For more on the transition from interdependence to modularization, please refer to Clayton M.
Christensen and Michael E. Raynor, The Innovator’s Solution: Creating and Sustaining Successful
Growth (Cambridge: Harvard Business School Press, 2003) pp. 130–135.
69
Jon Marcus, “Conventional College Route Shifts to ‘Education Buffet,’” The Hechinger Report, May 1,
2013,
http://hechingerreport.org/content/conventional-college-route-shifts-to-education-buffet_11900/
(accessed May 1, 2013).
70
As of May 2014, Patten’s rate is $520 per month.
71
The authors of the study, “Portable, Stackable Credentials: A New Education Model for IndustrySpecific Career Pathways,” describe the portable credentials as “trusted by employers and educational
institutions throughout the country and perhaps even the world.” Stackable would mean that students
would be “able to earn shorter-term credentials with clear labor market value and then build on them
to access more advanced jobs and higher wages.” See James T. Austin, Gail O. Mellow, Mitch Rosin,
and Marlene Seltzer, “Portable, Stackable Credentials: A New Education Model for Industry-Specific
Career Pathways,” McGraw-Hill Research Foundation, November 28, 2012, p. 7, 20, http://mcgrawhillresearchfoundation.org/wp-content/uploads/2012/11/PSC_white_paper.pdf.
72
Austin, Mellow, Rosin, and Seltzer, p. 20.
73
Austin, Mellow, Rosin, and Seltzer, p. 7.
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University of Wisconsin’s UW Flexible Option program (UW Flex), a competency-based pathway for
older students to complete their degrees in a flexible and more expedient manner, was created in
order to fill workforce needs. The program is able to assess what students know and need to know by
engaging with employers to define the competencies they need and build appropriate assessments to
measure whether students have mastered them. At the same time, UW Flex provides employers with a
useful tool to recruit, train, and retain talented workers. The core competitive advantage of these kinds
of competency-based programs is that they provide a clear interface with industry needs. See “UW
Flexible Degree: A personalized, quality, affordable higher education model to help get Wisconsin
working,” Office of Governor Scott Walker, June 2012,
http://www.wisgov.state.wi.us/sites/default/files/documents/6.19.12%20UW%20Flexible%20Degree%
20Proposal%20Packet.pdf.
Cisco has been doing this for years through its Cisco Networking Academy (CNA), a global
information and communications technology education program. Since 1996, CNA has served over four
million students and delivers over one million assessments per week in a variety of formats. The initial
version of the program offered four courses that prepared students to take the Cisco Certified
Network Associate (CCNA) examination, a certification test for entry-level networking professionals.
The CNA has since grown to cover many more subject areas; nevertheless, the program is built to
ensure that when a student successfully completes a course or final exam that she is able to translate
that into success on a related industry certification exam. Assessment data must be meaningful and
translatable as a true proficiency outside of the classroom.
75
Salman Khan, The One World Schoolhouse: Education Reimagined (New York: Hachette Book Group,
2012), p. 48.
76
This relates back to the stratification of academic departments and the publications produced within
increasingly narrow fields of specialization.
77
Minds of Our Own, Harvard-Smithsonian Center for Astrophysics, 1997,
http://www.learner.org/resources/series26.html (accessed February 9, 2013).
78
See Karen Birchard and Jennifer Lewington, “Shift to Applied Research Triggers Protests,” The
Chronicle of Higher Education, February 8, 2014, http://chronicle.com/article/Shift-to-AppliedResearch/144659/?cid=at (accessed February 8, 2014). See also Aisha Labi, “Researchers Resist
Pressure to Show Impact of Their Work,” The Chronicle of Higher Education, February 9,
2014, http://chronicle.com/article/Researchers-Resist-Pressure-to/144533/?cid=at (accessed February 9,
2013).
79
Research has now shown that standardized testing “artificially truncate[s] the pools of applicants who
would succeed” in college. Chief Investigator William C. Hiss has shown that in a study including
“twenty private colleges and universities, six public universities, five minority-serving institutions, and
two arts institutions—a total of approximately 123,000 student records at institutions with enrollments
from 50,000 students to 350, located in twenty-two US states and territories” that there is a virtually no
difference in graduation rates for students who submit or do not submit test scores. Nevertheless,
many admissions offices continue to rely on these numbers as sorting mechanisms and reliable
indicators of student potential and institutional fit. See William C. Hiss and Valerie W. Franks, “Defining
Promise: Optional Standardized Testing Policies in American College and University Admissions,”
National Association for College Admission Counseling (NACAC), February 5, 2014,
http://www.nacacnet.org/research/research-data/nacac-research/Documents/DefiningPromise.pdf
(accessed March 5, 2014).
It is also worth noting that the College Board has recently announced major changes in the
SAT that will go into effect in the spring of 2016. The test will focus on “relevant” vocabulary words
and evidence-based writing, as well as math that emphasizes problem-solving, data analysis, and
algebra. In an effort to even the playing field when it comes to test prep, the test company will be
partnering with Khan Academy to offer free online test preparation. See “Delivering Opportunity and
the Redesigned SAT,” The College Board, https://www.collegeboard.org/delivering-opportunity/sat
(accessed June 9, 2014).
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Anthony P. Carnevale, “RE: Docket ID ED-2010-OPE-0012,” Georgetown University Center on
Education and the Workforce, August 17, 2010, p. 8,
http://cew.georgetown.edu/uploadedfiles/Public%20Comment.pdf.
81
“A Test of Leadership: Charting the Future of U.S. Higher Education, A Report of the Commission
Appointed by Secretary of Education Margaret Spelling,” U.S. Department of Education, September
2006, http://www2.ed.gov/about/bdscomm/list/hiedfuture/reports/final-report.pdf.
82
Both Sony and Honda took advantage of disruptive distribution channels. Discount retailers such as
Kmart, which had no after-sale capability to repair vacuum tube-based electronic products, were
emerging at the same time as Sony’s disruptive products. Solid-state radios and televisions constituted
the fuel that enabled the discounters to disrupt appliance stores. By selecting a channel that had upmarket disruptive potential itself, Sony harnessed the energies of its channel to promote and position
its products.
Honda’s business took off when it began to distribute through power equipment and sporting
goods retailers, because it gave those retailers a chance to migrate toward higher- margin product
lines. In each of the most successful disruptions we have studied, the product and its channel to the
customer formed this sort of mutually beneficial relationship.
83
According to Michael E. Echols, research shows that employers who invest in an employee’s pursuit
of a degree will actually have a higher likelihood of retaining those same employees. He cites a
“reduced turnover by 55 percent in the studied company where salary actions were related to the
awarding of the degree. This result is consistent with findings in retention surveys that list the
opportunity to develop and grow as one of the most attractive benefits of a job…the data show
increased retention and not greater turnover when policies include salary action and promotion as part
of the investment strategy.” See Michael E. Echols, ROI on Human Capital Investment, 2nd ed.,
(Arlington, Texas: Tapestry Press, 2005), p. 30.
84
“Half of recent college grads underemployed or jobless, analysis says,” Associated Press, April 23,
2012, http://www.cleveland.com/business/index.ssf/2012/04/half_of_recent_college_grads_u.html
(accessed on January 7, 2013).
85
“What America Needs to Know About Higher Education Redesign: The 2013 Lumina Study of the
American Public’s Opinion on Higher Education and U.S. Business Leaders Poll on Higher Education,”
Gallup, Inc., February 25, 2014, p. 25, http://www.gallup.com/strategicconsulting/167552/americaneeds-know-higher-education-redesign.aspx (accessed April 1, 2014). Scott Jaschik and Doug
Lederman, “The 2014 Inside Higher Ed Survey of College & University Chief Academic Officers,” Inside
Higher Ed, 2014, p. 28,
http://www.insidehighered.com/download/form.php?width=500&height=550&iframe=true&title=Surv
ey%20of%20College%20and%20University%20Chief%20Academic%20Officers&file=IHE_ProvostsSurv
ey-final.pdf.
86
John Dewey, Democracy and Education: An Introduction to the Philosophy (London: Forgotten
Books, June 23, 2012).
87
Dewey
88
In July of 2013, Broward College became the first college funded by the U.S. Department of Labor to
implement a fully online, competency-based associate of science degree with the help of WGU. The
$3.2 million grant is financing a Computer Systems Specialist degree in an “accelerated format” for
“veterans, displaced workers and students who are looking to quickly advance their careers.” See
“Innovative Self-Paced Online Computer Systems Specialist Degree Now Offered,” Broward College,
July 24, 2013, http://www.broward.edu/news/Pages/Innovative-Self-Paced-Online-Computer-SystemsSpecialist-Degree-Now-Offered.aspx (accessed on July 25, 2013).
89
WGU officials are guiding all 11 of these community colleges to help them create new competencybased credentials as well as transfer pathways into WGU bachelor-degree programs for those students
who wish to continue their work from their community college associate’s degrees.
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What is more, many established institutions feel as though they have sensed the threat of online
education and are responding by investing more money into technology, but these are merely
sustaining innovations for their existing value networks.
91
Joel Shapiro, “Competency-Based Degrees: Coming Soon to a Campus Near You,” The Chronicle of
Higher Education, February 17, 2013, http://chronicle.com/article/Competency-Based-Degrees/144769/ (accessed February 17, 2013).
92
Anthony P. Carnevale and Jeff Strohl, “Separate and Unequal: How Higher Education Reinforces the
Intergenerational Reproduction of White Racial Privilege,” Georgetown University Public Policy
Institute and Center on Education and the Workforce, pp. 7, 16,
http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/Separate&Unequal.FR.pdf.
93
“Education and Preparing the Workforce for the 21st Century.”
94
Whereas 34 percent of high-achieving, high-income students apply to selective institutions, only 17
percent of the high-achieving, low-income students do. The effects are non-trivial, as the schools that
are more competitive invest more in instructional expenditure by an order of magnitude (these
expenditures do not necessarily translate into increased outcomes in K–12). More importantly perhaps,
students who undermatch potentially lose out on the social capital benefits that come with being part
of a network of other elite, high-achieving students. See Caroline Hoxby, “Results of Expanding
College Opportunities project,” prepared for presentation to Stanford University Economics
Department, April 8, 2013. See also Caroline Hoxby and Sarah Turner, “Expanding College
Opportunities for High-Achieving, Low Income Students,” SIEPR Discussion Paper No. 12-014, Stanford
Institute for Economic Policy Research,
http://siepr.stanford.edu/?q=/system/files/shared/pubs/papers/12-014paper.pdf.
95
We must note, however, that increased odds of completion are tied to the selectivity of the schools.
Elite schools, for instance, have the luxury of cherry picking from the best and brightest students and
those most likely to complete school.
96
Seventy percent of U.S. workers had high school degrees or less—almost 35 percent were high
school dropouts—and the vast majority of those workers were positioned in the middle class. See
Anthony P. Carnevale, “Education and Preparing the Workforce for the 21st Century,” prepared for
presentation at the 10th Anniversary Annual Meeting of the Presidents’ Forum, October 7–8, 2013.
97
“Advancing Competency-Based Education Demonstration Project Act of 2013,” H.R. 3136, 113 Cong.
(2013), https://www.govtrack.us/congress/bills/113/hr3136 (accessed March 5, 2014).
98
“Advancing Competency-Based Education Demonstration Project Act of 2013,” H.R. 3136.
99
Heather Staker, “The engine behind WGU: Configuration of a competency-based information system,”
Innosight Institute, February 2012, http://www.christenseninstitute.org/wpcontent/uploads/2013/04/The-engine-behind-WGU.pdf
90
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